Patrick HillmanPatrick Hillmann

When many of us think of the term “greenmailing,” we recall that iconic scene in Oliver Stone’s “Wall Street.” Activist investor Larry Wildman, in a fight with corporate raider Gordon Gekko for control of Anacott Steel, looks at his adversary and says, “You’re a two-bit pirate and greenmailer, nothing more. Not only would you sell your mother to make a deal, you’d send her C.O.D.”

Thirty years later, a new definition of greenmailing is taking shape. It’s not about the cash a company pays to make a corporate raider go away. It’s about the settlements some plaintiffs’ attorneys seek when they threaten to take a company to court over often-frivolous claims. What makes the new lexicon so rhetorically fitting is that no industry has experienced the phenomenon with the same volume and intensity as natural products, primarily the food industry.

With increasing frequency, companies that label their products with claims such as “natural” are faced with a calculus: use the term and possibly be sued. Emboldened by ambiguous U.S. Food and Drug Administration statues regarding the use of the terms, a recent California Supreme Court ruling allowing such suits to move forward on a class action basis and an army of health-conscious food bloggers galvanized with their views, plaintiffs’ attorneys are putting a Tobacco-sized bulls’ eye on food manufacturers’ backs.

Twenty-eight such lawsuits were filed in a single Northern California district between March 2012 and March 2013. The ensuring years brought more of the same across the country. Worse, these suits continue to move forward despite the fact that it’s plaintiffs’ lawyers and advocacy groups, not consumers themselves, who are driving the epidemic.

“These opportunistic plaintiff’s attorneys are poised to seize on packaging and claims to extort private settlements from food companies,” said Claudia Lewis and Heili Kim, veteran food attorneys with Venable LLP. Ultimately, these demand letters result in the unenviable choice: settle now or pay more in legal costs and damage to your brand and reputation.

Recently, Whole Foods joined the ranks of targeted companies that include such high-profile names as Ben & Jerry’s, Campbell Soup, PepsiCo, Cargill and dozens of others. As of writing, Whole Foods is fighting claims that it misled consumers into paying more for products labeled “all natural” when they allegedly contained synthetic ingredients. In the end, the company may win the dismissal it’s seeking in two separate class actions related to the issue. But even that outcome would not enable Whole Foods to emerge unscathed. Enter the bloggers, who are taking the company to task and impacting consumer perceptions with great effect.

Starting back in 2014, food bloggers began jumping on the Whole Foods bandwagon, seeking to influence the more than half of Americans who now access nutritional information online. One such post, entitled “The Lies that Whole Foods Tells,” paints the company as dishonest and the face of a larger, industry-wide problem with natural labeling.

Even if there’s no coordination between the plaintiffs’ attorneys and bloggers, the result is the same: an increase in negative public perception, among other pressure points, that encourages the defendant to settle. In an era when 99 percent of consumers report that they “feel that the food/nutrition information [they] get on the Internet is reliable and trustworthy,” the plaintiffs’ bar has found itself a powerful ally.

While a company as deep-pocketed as Whole Foods can weather the storm, smaller operations are often at the blogosphere’s mercy. Take the case of Ava Anderson Non Toxic. The company was the winner of Inc.’s Coolest College Startups in 2015. In December 2015, a blogger began questioning whether the company’s dish soap product really fit the definition of “organic.” The blogger community began piling on. Within a month, a once promising enterprise was forced to close its doors.

Plaintiffs’ attorneys see that all-too-common result converging with a natural products industry that now does $35.9 billion sales annually (representing nearly five percent of total U.S. food sales). Who can blame some of them for seeking to take advantage of a marketplace with unclear rules, sympathetic media and seemingly bottomless resources to make a negative story go away?

However, what does this mean for small and mid-sized companies, without a bulging purse, who also now find themselves the target of these often-frivolous lawsuits? Many of these fledgling enterprises are forced to suffer in silence, often times settling out of fear, understanding that even a rumor of a suit regarding its ingredients could result in a young company’s coup de grace, as well as follow on suits if such information becomes public in a complaint.

But there are options for companies unwilling to play the game.

Look at Monsanto, which is working with mommy bloggers to shape public opinion about biotechnology, industrialized farming and the impacts of “junk food.” Its brands have been hosting events with these key market influencers and have even converted a few of them into brand ambassadors.

“Promoting and partnering with bloggers is an important component to the overall marketing strategy and can be done in a way that is consistent with the law”, said Lewis and Kim.

Blogger engagement is a smart strategy for any company in the organic space today, but so is planning. Companies need to be ready to gather facts and communicate transparently, should criticisms arise or a plaintiffs’ attorney comes knocking. They need to know the bloggers before they need them, and even provide the blogger community with advance notice (and perhaps even exclusive interviews) before disseminating crisis or litigation messaging on a broad scale. Doing so will give the bloggers time to think through their posts and answer questions before they are pressured to do so by their readers.

Perhaps most important, companies need to ensure clear visibility throughout the supply chain. Far too many companies work with formulators that hide behind a “proprietary formula.” If you are one of them, alarm bells should be ringing (because they likely are at the plaintiffs’ firms looking to target you). Insist that your suppliers be just as transparent as you are with your consumers and protect a significant liability.

The astonishing amount of misinformation in the natural marketplace is a problem for companies; but it is also an opportunity to fill the vacuum with messaging that corrects the record and leverages voices trusted by today’s health-conscious consumers. Win in the Court of Public Opinion, and you find that the courtroom takes care of itself.

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Patrick Hillmann is a senior vice president of the crisis practice at LEVICK, a global communications and public affairs firm.