General Mills Opens New Frontier in Denying Consumers Right to Sue: Just Use Its Products

We have just moved beyond an event horizon as far as the corporate version of neo-feudalism is concerned. Remember that one of the salient qualities of feudalism was that the nobility had far more rights than the peasants.

By contrast, one of the hoary old notions of jurisprudence is equality before the law. That doesn’t serve our corporate-overlords-in-the-making too well. Subverting jurisprudence over time via inculcating pro-business thinkings through the law and economics movement apparently isn’t good enough for them; they want even higher odds of favorable outcomes. One of them is sneakily getting customers to relinquish their right to sue via getting them to agree to be subject to binding arbitration.

This requirement has long been in place as a condition of getting a securities brokerage account. Although it is difficult to prove, many securities brokerage customers feel that they don’t get the restitution which they deserve through this process (and one might cynically observe that that is a feature, not a bug). Some arbitration forums have been so clearly biased as to lead attorneys general to sue. For instance, as described by Martin & Jones:

The Minnesota Attorney General recently sued the National Arbitration Forum (“NAF”), contending that NAF committed fraud and engaged in false advertising and deceptive trade practices by intentionally misrepresenting its independence and neutrality and by hiding its ties to the debt collection industry. Soon after the case was filed, NAF agreed to a settlement, the terms of which included a requirement that NAF stop accepting all future consumer arbitrations.

The Attorney General’s lawsuit and others recently filed against NAF demonstrated that NAF was anything but the neutral, unbiased forum it represented itself to be. The lawsuits exposed the following: (1) NAF actively concealed the fact that it was owned and managed by the same New York hedge fund which also owned the three largest debt collection law firms which had claims decided by the NAF; (2) NAF helped creditors draft claims to be filed against consumers or referred them to debt collection law firms which would then file arbitration claims against the consumers before the NAF; (3) NAF solicited business from creditors by touting arbitration before the NAF as a less costly and more effective debt collection tool than the courts; and (4) NAF instructed arbitrators how they should rule with respect to certain claims and denied assignments to arbitrators who found against repeat business filers.

In other words, arbitration forums can all too easily become privatized kangaroo courts. And even when generally well-run arbitration panels have serious shortcomings in process, challenging the results of arbitration due to arbitrator bias rarely succeeds.

Heretofore, binding arbitration clauses have been limited to cases where a consumer enters into a contract with a service provider, such as a credit card issuer or a cell phone company. But General Mills is trying to prohibit consumers from suing based on penny-ante benefits and even mere contact. From the New York Times:

General Mills, the maker of cereals like Cheerios and Chex as well as brands like Bisquick and Betty Crocker, has quietly added language to its website to alert consumers that they give up their right to sue the company if they download coupons, “join” it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways…

Instead, anyone who has received anything that could be construed as a benefit and who then has a dispute with the company over its products will have to use informal negotiation via email or go through arbitration to seek relief, according to the new terms posted on its site.

Yves here. Since when is liking a product a benefit to the consumer??? It’s a benefit to the merchant. That alone gives you an idea of what an overreach this is. Back to the article:

“Although this is the first case I’ve seen of a food company moving in this direction, others will follow — why wouldn’t you?” said Julia Duncan, director of federal programs and an arbitration expert at the American Association for Justice, a trade group representing plaintiff trial lawyers. “It’s essentially trying to protect the company from all accountability, even when it lies, or say, an employee deliberately adds broken glass to a product.”…

Companies have continued to push for expanded protection against litigation, but legal experts said that a food company trying to limit its customers’ ability to litigate against it raised the stakes in a new way.

What if a child allergic to peanuts ate a product that contained trace amounts of nuts but mistakenly did not include that information on its packaging? Food recalls for mislabeling, including failures to identify nuts in products, are not uncommon.

“When you’re talking about food, you’re also talking about things that can kill people,” said Scott L. Nelson, a lawyer at Public Citizen, a nonprofit advocacy group. “There is a huge difference in the stakes, between the benefit you’re getting from this supposed contract you’re entering into by, say, using the company’s website to download a coupon, and the rights they’re saying you’re giving up. That makes this agreement a lot broader than others out there.”

And it turns out that the reason General Mills is so keen to shield itself from litigation is that it has repeatedly engaged in deliberately dishonest product labeling, and apparently intends to keep up this profitable form of consumer fraud:

Last year, General Mills paid $8.5 million to settle lawsuits over positive health claims made on the packaging of its Yoplait Yoplus yogurt, saying it did not agree with the plaintiff’s accusations but wanted to end the litigation. In December 2012, it agreed to settle another suit by taking the word “strawberry” off the packaging label for Strawberry Fruit Roll-Ups, which did not contain strawberries.

General Mills amended its legal terms after a judge in California on March 26 ruled against its motion to dismiss a case brought by two mothers who contended that the company deceptively marketed its Nature Valley products as “natural” when they contained processed and genetically engineered ingredients.

“The front of the Nature Valley products’ packaging prominently displays the term ‘100% Natural’ that could lead a reasonable consumer to believe the products contain only natural ingredients,” wrote the district judge, William H. Orrick.

So here’s a simple answer. Don’t buy anything made by General Mills. And encourage everyone you know to do the same. This is a list of their brands:

8th Continent
Betty Crocker
Big G Cereals
Bisquick
Bugles
Cascadian Farm
Cheerios
Chex
Forno de Minas
Frescarini
Fruit Snacks
Gardetto’s
Gold Medal
Green Giant
Häagen-Dazs
Hamburger Helper
Jus-Rol
Knack & Back
La Salteña
Latina
Lloyd’s
Lucky Charms
Muir Glen
Nature Valley
Old El Paso
Pillsbury
Pop Secret
Progresso
Totino’s/Jeno’s
Trix
V. Pearl
Wanchai Ferry
Wheaties
Yoplait/Colombo

Please circulate this post widely. Thanks!

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52 comments

  1. Ned Ludd

    Cascadian Farm and Muir Glen are worth highlighting, for anyone who buys from co-ops or natural food stores. Many of the small, independent companies that sold organic food in the 1990’s are now subsidiaries of giant corporations like General Mills.

    1. Oregoncharles

      Yes, we buy both of those at the local co-op. I just checked the ingredient list on the Muir Glen tomatoes – nothing very strange, assuming the label is correct. Which I gather is a big assumption. It’s certified organic, so the certifier (Washington) would be the most effective form of recourse.
      And Cascadian Farm frozen OJ – ironic, considering the name. I might wonder what the “organic natural flavor” is, though the logical candidate is orange peel, which we use constantly.

      Incidentally: another recourse is to avoid interacting with General Mills in any of the ways mentioned – which I wouldn’t do.

      For us, not buying from them at all poses a dilemma, though I can pressure the co-op to find other sources.

  2. allcoppedout

    Sounds mad Yves. We had a period in the UK long before computing when it was impossible to take dud stuff back to retailers, then somehow realised our Sale of Goods Act 1893 applied and always had. If corporates are going to be able to evade the law as you say here things are really bad – and we usually get them later. The products are off our list from now on whether they extend this ludicrous practice here or not.

  3. Hugh

    The people at General Mills who came up with and approved this public relations disaster in the making should be fired. General Mills needs customer loyalty to sell its generally overpriced name brands. Orwellian legal theories like this one are a great way to destroy that loyalty. I agree circulate this story and the list of brand names far and wide. It is what General Mills deserves.

    1. Banger

      I don’t think so, Hugh. General Mills know this issue will not be generally known and can safely ignore the few who do know–endless advertising trumps everything. Everything they do is on a spreadsheet–possible losses vs. possible gains.

      1. TheCatSaid

        Doing it and TELLING OTHERS what one is doing could lead to unexpected impact. For example, telling others via letter to editor or radio station phone-ins would reach a greater number of people.

        You never know when an entity with greater reach might pick it up, resulting in enough public pressure to tip the PR scales of the company.

        Action of any kind is better than inaction. One should never assume that an action that looks small cannot have greater impact even if unexpected.

        1. McMike

          I have zero confidence that enough of the public can be roused to give a hoot about arcane down-range stuff like this.

          Go ahead, go talk to ten people who are either centrist/apolitical or acquaintances like coworkers, parents at your kids school etc. Tell them about the injustice of binding arbitration and the absurdity of secret involuntary opt-in provisions. Watch their eyes roll. Watch them avoid you in the future. Watch them not change their shopping habits one bit.

          Hell, we have a nation still pretending with a straight face that its private health care system isn’t a complete train wreck.

        2. Nobody (the outcast)

          The list of malfeasance and wrongdoings which we should be telling others about, raising hell about, and withholding dollars from could fill a 1000 page book. Most seem to be too busy running in their hamster wheels to pay attention and have become so dependent on the products and services of the miscreants that I don’t see how things will change short of a total collapse. It’s not like other options don’t exist. It’s not like TINA. The only vote you have is how you spend your dollars and often it comes down to the lesser evil thing, similar to what we tell ourselves about our “options” at the ballot box. Revolution? Forget about it. This society is too fractured to get together on much of anything beyond very local issues. Piling on complexity, destroying any sense of common cause and common ethics, and utilizing mass media makes it ridiculously easy to divide and conquer. Ethics and justice are quaint notions of previous centuries and are nearly dead. Gresham’s dynamic and all that.

      2. Oregoncharles

        You assume a super-human level of competence, which is a really big assumption.

        Companies often back down when faced with consumer pressure campaigns – they can’t afford to take the chance.

  4. Dean

    I’ve personally stopped eating all processed foods period. With the suspect ingredients (gmo’s, chemicals, preservatives, devoid of meaningful nutrients) in processed foods there are no compelling reasons for me to eat ‘their foods’.

    Instead I eat whole natural foods and generally shop the perimeter of the grocery store. I can’t avoid all of the above (dairy from cows fed hormones, pesticides on my fruits and veggies, gmo corn fed to the cows and pigs) but I feel this way of eating is closer to the way nature intended food to be eaten. Food that comes in boxes, frozen, laden with chemicals, and heeding nutrients to be added back into it doesn’t qualify as ‘food’ in my book, including those ‘foods’ manufactured by General Mills.

    1. Katniss Everdeen

      I’d say ” taking the word “strawberry” off the packaging label for Strawberry Fruit Roll-Ups, which did not contain strawberries tells you just about all you need to know.

      I wonder if they got to leave the word fruit?

      1. Fair Economist

        Probably. They probably even say something like “70% Fruit products”. Which is technically true if highly misleading, because those things are basically sugar derived from apples or grapes.

    2. McMike

      I agree with the thrust of what you are saying, But if you enter a grocery, even eternal vigilance is not enough.

      Notice the organic brands in the list above. There is constant pressure to weaken the restrictions on what can be done under organic labels. Already it doesn’t mean what you think it means.

      Whole Foods itself gets caught out continuously trying to do “natural” bait and switch games, as do many makers who sell both an organic and a not organic natural line – trying to benefit from a halo effect. Not to mention sourcing from China.

      Look closely at organic yogurt, do you see something called FOS? wtf is that – a “nutraceutical”…? Do you know what restrictions there are on the full life cycle of the cows? Hint: not as strong as you would like to think.

  5. Skeptic

    Kudos to NC for pointing out all this Food Fraud. Vermont, by the way, is close to passing a GMO labelling act. Part of the future cost of most people’s healthcare will be directly related to the food they ingest.

    Buying boxed, industrialized cereal is like buying toxic, worthless securities from the 1%. They are Nutritional Fraud. If you like MBS, you’ll love SADIOS. Stop feeding the Boxed Cereal Beast and either mill your own grain bought cheaply in bulk or buy milled grain from a reputable supplier.

    “Whole grains contain almost 90% of all the vitamins, minerals, and protein you’ll ever need. However, commercially milled products don’t offer you those nutrients. Why? Once milled, the oils found in the bran and germ oxidize and turn rancid within 72 hours. So for commercial purposes, both the bran and germ—and all the nutrients contained within them—must be removed in order to give products a shelf life.”
    http://www.homesteadharvest.com/article8.html

    You will save money both in the cost of your food, in the cost to your health and the cost to the environment for all that shipping, packaging, and industrial waste. This is one real, practical, easily doable way to put the 1% on a Diet!

    1. NotTimothyGeithner

      I can’t wait to see “with all natural ingredients….product may not be natural/organic in vermont”

    2. Chris S.

      Those kinds of labeling laws are the kinds of laws that get attacked in free trade agreement tribunals. They are seen as market access barriers and trade barriers that might be designed to create a bias in favor one country’s products over anothers.

    3. efschumacher

      Mill your own is good advice on nutrition grounds. I don’t yet see it on cost grounds however. The least I can pay locally (at MOMs) for hard winter wheat berries is $1.29 per lb. That is still dearer than a $5 bag of King Arthur. Somebody is still making big bucks off what used to be called ‘dry goods’.

      The ‘ancient grains’ like einkorn and spelt are even dearer, but totally unavailable through mainstream commercial means. I do 60%-40% modern and ancient, to get some of the benefit without totally outrageous cost. Millet is also a good alternative, at $1.79 (at Whole Foods).

  6. Edward Downie

    Gol-darned, meddling government interfering with a corporation’s God-given right to tell lies about its products! How dast they!

    1. Dwight

      Yeah, and so much for the libertarian claim that pollution and other harms to the public can be adequately addressed with tort claims, so we don’t need government regulation. Even that is too much accountability for General Mills.

  7. taunger

    Hmm, Haagen-Daaz is a Unilever brand, which also owns Ben and Jerry’s, sooo, does General Mills own Unilever? If so, time to give up the Chubby Hubby, buddy.

    1. Yves Smith Post author

      Um, no, if I read this correctly, it is a General Mills brand:

      Häagen-Dazs was bought by Pillsbury in 1983. General Mills bought Pillsbury in 2001.[5] However, in the United States and Canada, Häagen-Dazs products are produced by Nestlé subsidiary Dreyer’s, which acquired the rights as part of the General Mills-Pillsbury deal.[6]

      So as I parse this, General Mills has allowed Nestle (Unilever) to license the brand and manufacture here. They acquired “the rights,” which is intellectual property language, and apparently not the company.

  8. Fraud Guy- Also

    I think it’s just a matter of time before the checkout process at big retailers includes a step where you have to hit “ok” on the credit card swipe screen agreeing to binding arbitration for everything you just bought, whether paid for by cash or credit. In fact, it surprises me that it isn’t already happening.

    1. Chris S.

      There just will be a HUGE EULA you will have to agree to before buying anything at the web site.

  9. washunate

    I’d say the problem isn’t General Mills. The problem is the concept of binding arbitration between a relatively powerless individual and a large organization.

    More specifically, the problem is that our publicly run legal system accepts this concept, with its various well-paid fiefdoms of technocratic elites protecting their own outsized privileges.

    1. Klassy

      Yes, and it is pathetic that our only recourse is through (not) shopping.
      Home improvement/hardware stores have been using binding arbitration for a long time.

  10. TedWa

    Great article and I didn’t know General Mills products were so varied ! GM says they’re going to make a GMO free Cheerios product – yeah, right. They are definitely off my list. I’m already paring down what I will and won’t buy from this list of Monsanto GMO supporting companies.

    Aunt Jemima Aurora Foods Banquet Best Foods Betty Crocker Bisquick Cadbury Campbells Capri Sun Carnation Chef Boyardee Coca Cola ConAgra Delicious Brand Cookies Duncan Hines Famous Amos Frito Lay General Mills Green Giant Healthy Choice Heinz Hellmans Hershey’s Nestle Holsum Honnel Hungry Jack
    Hunts Interstate Bakeries Jiffy KC Masterpiece Keebler/Flowers Industries Kelloggs KidCuisine Knorr Kooi-Aid Kraft/Phillip Morris Lean Cuisine Lipton Lorna Linda Marie Callenders Minute Made Morningstar Ms. Butterworths Nabisco Nature Valley Ocean Spray Ore-Ida Orville Redenbacher Pasta-Roni Pepperidge Farms Pepsi Pillsbury Pop Secret Post Cereals Power Bar Brand Prego Pasta Sauce Pringles Procter and Gamble Quaker RaguSauce Rice-A-Roni Smart Ones Stouffers Sweppes Tombstone Pizza Totinos Uncle Ben’s Unilever

  11. P FitzSimon

    Another reason to minimize damage from litigation is the expectation of issues from the outsourcing of food processing.

  12. John B

    This is outrageous. Maybe the courts will finally draw the line here. Nah. But if it is upheld, possibly some creative consumer lawyer can figure out a way to use this in reverse. Corporate marketers use the web a lot too. Maybe websites could include in their terms of service a proviso that anyone using them renounces arbitration agreements on behalf of their employer against any other user? Consumer groups could notify companies that any who directly solicit their members via Google ads or otherwise renounce arbitration against them and submit to class action jurisdiction of the courts? I’m not an expert, but maybe two can play at this game.

    1. McMike

      “Maybe the courts will finally draw the line here.”

      Thanks a bunch. I just spit coffee all over my keyboard.

  13. weinerdog43

    Don’t forget that Yoplait (General Mills) is still a ‘proud sponsor’ of the Susan G. Komen Foundation who recently took it upon themselves to throw Planned Parenthood under the bus.

    1. McMike

      Komen is a great example of the right wing/corporatist takeover of putatively left-ish organizations caught out in the daylight. A relentless process of co-opting by funding, and taking over Boards and Executive Directorships.

      Look at the Boards of your favorite left-ish foundation or nonprofit. The names are invariably a who’s who of mid- and upper-level corporate executives.

      Sometimes the takeover is overt and ideological, like CPB and PBS. Sometimes it is creeping and stealthy. I assure you it is going on in a million places without anyone noticing.

      In the case of Komen, the right wing Manchurian Candidate merely went “on tilt” (when they misjudge how much they can take off the mask once in power) or overshot the zeitgeist (by pushing the agenda too far too fast).

      Not unlike the Koch takeover of Cato for that matter.

    1. Chris S.

      How do you know when a label says real organic that it is if a law says that anybody can use that label with minumal or no actual inspections. In many countries, its just a big joke, a way farmers can see produce that previously would have been less marketable for higher prices.

  14. JEHR

    It seems to me that the bigger the corporation, the worse its products become. I try to buy cereals, fruits and vegetables that are grown locally. I absolutely refuse to buy snow peas grown in China!

  15. XRayD

    “…the six-figure political contributions made by the doctors who are the country’s top Medicare billers. “While I was initially disturbed by this report,” my friend wrote in his wry email, “John Roberts reassured me that, because there was no clear quid pro quo, this was just ‘free speech, democracy in action.’ ”

    http://www.nytimes.com/2014/04/17/opinion/an-indecent-burial.html?comments&_r=0#permid=11584470

    Imagine General Motors, Ford, Banks, Drug Companies .. doing what General Mills is trying to do.

    And with the Roberts Court, Liking something on Facebook will be quid-pro-quo amounting to not buying a product for money only but simultaneously giving up your legal rights.

  16. RUKidding

    Back in the “good old days,” there was a nascent movement in support of truth in packaging of our “food,” especially pre-packaged stuff. That’s how we got the labeling that we have, which is helpful. But I’ve noticed this overall push-back from the Bigs to somehow avoid being honest in at least in advertising (the Yoplait specious claims, for ex), if not also on labeling. CA tried to pass a ballot initiative to have all pre-packaged goods labeled as GMO or not. Of course, Monsanto (and possibly also Cargill; not sure) poured millions into the anti-labeling campaign. Sadly, the initiative failed, but I expect to see another again sometime and hope it will pass.

    If these corporations are so “down” with their products, then why are they trying to avoid litigation? Seems like, if they produced good products & advertised them accurately, then the need for this end-run gambit would go away. Ergo, one draws the inevitable conclusion that the Bigs wish to pull the wool over consumers eyes & get away with all kinds of crapification (up to and including shoving *dangerous* stuff down our hapless gobs) with impunity.

    Who’s surprised here?

    The antidote, as discussed by others, is to buy farm fresh produce from local organic farms, something that I am lucky to have at my fingertips in CA. Plus also avoid pre-packaged stuff as much as possible. Sadly, such options are not necessarily available to the hoi poloi, who ends up being poisoned by these bastards, and now they have limited legal redress.

    Yes: corporate feudalism 101.

  17. TedWa

    Monsanto et al supports GMO labeling in Europe but fight it tooth and nail here. Do they have more respect for Europeans? Sure seems it

    1. RUKidding

      I don’t think Monsanto “supports” GMO labeling in Europe. I think they were forced into it early in the game. When CA came up with the initiatives, Monsanto threw a boatload of money at it and had a very hard-hitting – and to the unwary & uneducated, rather “reasonable” sounding – advertising campaign. Monsanto won that round but not without paying big bucks for it.

  18. sd

    I wonder if this has anything to do with ongoing research that shows the damage caused by high yield gluten typically used in processed foods. Not to mention the other crap they throw in there.

  19. RUKidding

    Somewhat related, here is news about a bill moving through the CA Assembly and looks like to pass:
    http://www.therecorder.com/id=1202651456317/'Yelp'-Bill-Advancing-in-Assembly?slreturn=20140317131949
    Called the Yelp Bill, it protects consumers from companies who go after them when consumers lodge online complaints about a company’s purported bad business practices. This bill would bar a retailer or service provider from forcing customers to waive their rights to comment on their experiences with a business “unless the waiver was knowing, voluntary, and intelligent.” Customers, the attorney general and district attorneys could sue violators for as-yet-specified civil penalties under the bill.

    Just in the nick of time… but no doubt the Bigs will find more ways to weasel around such triffling piffles as the “law.” File under: FWIW.

  20. Awake

    The thought that came to mind when reading about limiting consumers’ rights via arbitration clauses is the good research that shows how deeply GMOs can damage our collective health, and may have done already. The studies are becoming more numerous. People ARE beginning to wake up.
    And — it’s a lot easier to “influence” arbitrators than to win through a jury trial. We can chat about this for days/years but what’s it going to take to create real change?

  21. GuyFawkes

    Better yet:
    1) Don’t use their products! and;
    2) Call their corporate offices and let them KNOW you will not abide by this corporate blackmail: 1-800-248-7310.

  22. Hugo Stiglitz

    I believe General Mills products clearly state, in 6 pt font on all their packaging, something to the effect of:

    “Purchase, use of, mentioning, looking at, or thinking about this product absolves the holding company of the manufacturer and all its subsidiaries of any legal responsibility for ill effects or anything at all associated with the consumption or existence of this product.”

    So the consumer has been fairly warned.

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