You’ve probably heard about the recent class action lawsuit filed against Taco Bell, alleging that their tacos don’t really contain beef (or, rather, contain only 33% beef, plus a variety of “extenders” and “non-meat substances” ranging from “autolyzed yeast extract” to silicon dioxide, a.k.a. sand). (Presumably, this will be an easier plaintiff class to recruit than the potential plaintiffs in the YouPorn/“History Sniffing” lawsuit we reported on last month. But maybe I’m overestimating people’s willingness to admit eating Taco Bell.) According to the lawsuit, Taco Bell is misleading the public by saying its products contain “real beef” when, in fact, the products only contain the appetizingly-named “taco meat filling.” Although I find it hard to believe that anyone might have actually decided to go to Taco Bell thinking their taco was going to be 100% beef (it’s fast food, people!), these types of lawsuits are quite common, and the legal foundation of the claim is fairly straightforward.
Boiled down to its essence, Taco Bell is accused of trying to mislead the public about the quality of its product. Legally, Taco Bell’s statements about its meat are considered “commercial speech” — Taco Bell is trying to get people to buy tacos (well…“tacos,” anyway). The First Amendment provides limited protection for commercial speech, and rule #1 is: you have to tell the truth. So, the Food and Drug Administration and the Federal Trade Commission can pass laws restricting what fast food chains can and cannot say about their food. The same is true for other products, like vitamins, weight loss supplements and the like (hence the lawsuits against the makers of Men’s One-A-Day and Airborne, as well as trainer/TV personality Jillian Michaels, endorser of Calorie Control). So the question for Taco Bell is simple: did it comply with applicable regulations when touting its tacos as having “real beef” in them?
Taco Bell’s response, on the other hand, was fascinating. Taco Bell took out full-page “Thank You For Suing Us” ads in major newspapers across the country denying the allegations in the complaint. That’s not too surprising. But, Taco Bell did more than just offer facetious thanks and deny the allegations.
First, Taco Bell revealed that its taco meat is, in fact, 88% beef (well that’s a relief). It could have stopped there and achieved its goal of disputing the allegation in the lawsuit. But, Taco Bell went one step further: it provided a rough “not-so-secret” recipe for its “seasoned beef” (a term which Taco Bell understandably favors over “taco meat filling”), explaining that its meat contains 3% water (not too surprising), 4% spices (works for me), and 3% oats, sugar, yeast, citric acid and other, unidentified ingredients (oooookay). Amazingly, Taco Bell even identified the spices it uses: salt, chili pepper, onion powder, tomato powder, sugar, garlic powder, and cocoa powder. (Really? I’m going to have to try that in my next batch of tacos.) When was the last time a company revealed how it makes its product?
Taco Bell’s decision to publish this much information about its recipe is pretty surprising from a legal perspective. Most companies guard this information at all costs. Can you imagine any force in the world compelling Coke to take out a full page ad and set out its formula for the world’s best-selling soda? Not a chance. The reason for this is simple — Coke is successful because it’s unique. If someone else could make a cola that tasted just like Coke, people would have more options and Coke would sell fewer six-packs. And because patent registration offers only a limited term of protection (20 years from date of application) and would require public disclosure of the formulas/recipes being patented, companies like Coca-Cola and KFC née Kentucky Fried Chicken have long relied on trade secret law to provide indefinite protection for their highly-guarded formulas…as long as the companies succeed in keeping those recipes secret. (Unfortunately for KFC, several websites ran stories last month which claimed to reveal KFC’s secret original recipe of 11 herbs and spices. Because, you know, MSG counts as an “herb or spice.”)
Of course, making taco meat is a little easier than making a decent cola (I mean anyone who can scramble an egg can probably figure out how to make seasoned taco meat, especially with a little help from www.foodtv.com). But still, Taco Bell is taking a real risk.
Let’s say a former Taco Bell employee decides she wants to go out on her own and open a new chain of taco shops called Copy Cat Tacos. She says her products taste just like Taco Bell but cost less (perhaps our renegade copycat has her own cattle farm and a really cheap supplier for those other, uh, unidentified ingredients). And (for better or worse), it’s true, her products do taste just like Taco Bell. Could Taco Bell sue her for stealing its formula? Well, after the full page ads it took out last week, that might be tough. Copy Cat Taco could always say “I just read about their formula in the newspaper and figured it out.” Bye-bye, trade secret claim.
The other fascinating thing about Taco Bell’s ad is the threat at the bottom to sue anyone who has “made false claims” about Taco Bell’s beef. That’s kind of funny if you think about it: Taco Bell gets sued for lying about its meat and now wants to sue the other guy for lying about Taco Bell’s meat. (Kind of reminds you of kids fighting in the playground, doesn’t it?)
The problem for Taco Bell is that the law doesn’t work that way. As I mentioned above, Taco Bell’s statements about its meat are considered “commercial speech” — Taco Bell is trying to get people to buy tacos. On the other hand the allegations a person makes in a lawsuit are not “commercial speech.” Those statements are protected to the full extent of the First Amendment.
Making a case for “trade libel” — the actionable spreading of false information about the quality or characteristics of a competitor’s products — is difficult in the best of circumstances. But the First Amendment also says that people have a right to “petition the Government for a redress of grievances.” That’s a fancy way of saying people have a constitutional right to file lawsuits. (After all, that’s the American way, right?) So, as a general matter, you cannot be sued for anything you say in a lawsuit you file. Meaning you shouldn’t expect to see Taco Bell suing people for complaining that they were duped into buying tacos that were only 88% beef (even though we all know that’s a lie).
So, would-be plaintiffs, don’t let those ads scare you. Go ahead and put on your best Clara Peller wigs and keep on asking, “Where’s the beef?”