Salisbury-based Perdue Farms can proceed with lawsuit over Tyson ads

Daily Record, The (Baltimore), Apr 11, 2008 by Brendan Kearney

Salisbury-based Perdue Farms Inc. can proceed with its false- advertising suit against competitor Tyson Farms Inc., a federal judge has ruled.

U.S. District Judge Richard D. Bennett denied Tyson's motion to dismiss the suit, and promised to rule on Perdue's motion for a preliminary injunction within a week.

Perdue and its co-plaintiff, Mississippi-based Sanderson Farms Inc., say Tyson is misleading consumers with claims that its chickens are "raised without antibiotics" or "without antibiotics that impact antibiotic resistance in humans."

Tyson, like Perdue and Sanderson, uses chicken feed that includes ionophores, which combats intestinal disease in poultry but does not affect human resistance to antibiotics. The suit alleges that Tyson's ads amount to an implied claim that its product is superior to the competition.

Relying on a line of cases involving the Food and Drug Administration, Tyson had argued that the suit was invalid because the U.S. Department of Agriculture had approved the label upon which Tyson's advertising is based.

Bennett rejected that claim on Thursday afternoon. Unlike the U.S. Food and Drug Administration, the USDA only has authority over labeling, not advertising -- a "noteworthy distinction" in the context of this action under federal trademark law, Bennett noted.

"That authority does not provide immunity to any party regarding an allegation of deceptive advertising," Bennett ruled from the bench.

Randall K. Miller, an attorney for the plaintiffs, called Bennett's decision to let the case proceed "courageous" and "historic."

"There's no other case that directly resolves the legal issue that was presented in the defendant's motion to dismiss," he said. "We're hopeful that the court will likewise be courageous on the preliminary injunction decision."

Helene D. Jaffe, one of Tyson's lawyers, said she was "disappointed" and that she and the Arkansas-based meat company will "consider our options."

Making a change

Miller and Jaffe made their closing arguments to Bennett on the fourth day of the motions hearing, which has included testimony from executives at the three chicken companies, most notably two lengthy appearances by Tyson's senior vice president of consumer products David Hogberg.

Hogberg testified that the wording used in its initial advertising campaign, in which it said the chickens were "raised without antibiotics," was approved by the USDA last May and continued even during the negotiation period that ensued after the USDA notified the company in September that it was going to revoke its approval.

Those negotiations ultimately resulted in the language used in a new campaign, in which Tyson claimed its chickens are "raised without antibiotics that impact antibiotic resistance in humans." Later still, the USDA gave Tyson a grace period to remove the earlier, unqualified claims. The ending date of the grace period is confidential.

"We knew we had to make a change," Hogberg acknowledged on the witness stand. But he said the uncertainty as to the eventual result of negotiations with USDA made any action to curtail the first advertising campaign "premature."

In his closing arguments, Miller called that a "damn the torpedoes" approach and said Tyson has delayed replacing the original ads due to "greed."

He also pointed to a study the plaintiffs commissioned, which showed that the qualification added to the second campaign had little effect on consumers.

"That slogan 'raised without antibiotics,' in any form, is literally false," Miller said in his closing argument, calling the more recent qualified claim "more insidious." "Consumers are not told the truth."

Jaffe, though, argued that her client had taken appropriate action and that the claims were not false or misleading.

"In 20-20 hindsight, could things have been done faster, more fool-proof... ? Possibly. Probably," she said. "It wasn't perfect, but under the law, it was sufficient."

In her argument, Jaffe noted that Tyson's chickens have no human antibiotics in them, which is what consumers care about and why advocacy groups supported Tyson in its pleas to the USDA.

She also noted Perdue applied to the USDA for the same sort of labels in January, a claim that Miller acknowledged but called "Perdue bashing" and "sinister innuendo" irrelevant to the case.

Jaffe said Perdue's Harvestland brand, which currently advertises itself as "No Antibiotics Ever," used that slogan even as it used ionophores in its chicken feed until last November.