Milk Duds Case Is Latest Success for D.A.’s Fraud Unit

David Fairweather, a consumer fraud prosecutor in the Ventura County district attorney’s office, walked down the hall near his office recently with an open box of cat food in his hand.

“What do you think?” he asked everyone he encountered, inviting them to peer into the box and examine the contents.

The box, Fairweather explained, was 38% empty, a questionable amount of “slack fill” for a product. Attorneys who gathered in Fairweather’s office discussed the issue and whether it might merit an eventual lawsuit.

The fate of the case was not decided that day, but the discussion resembled hundreds of others that have taken place in the last 13 years among prosecutors in one of the most aggressive consumer fraud programs in California.

Deciding whom to prosecute is a process that prosecutors admit can be somewhat subjective. Still, they insist, the cases they select have an influence throughout Ventura County and beyond, forcing businesses to “clean up their act” wherever their products are sold.

“The impact is far greater from that unit than probably from any other unit in the office,” Dist. Atty. Michael D. Bradbury said.

Since the district attorney’s office established a full-time consumer fraud unit in 1979, the office has successfully sued or prosecuted:

* Auto shops that performed unnecessary repairs.

* Diet pill companies that made false claims about the success of their products.

* A toy manufacturer whose tape of children’s songs did not last as long as advertised.

* A vitamin company that said its product helped cure heart disease.

* A sporting goods store that was selling phony “name brand” shoes.

* A water company that sold ordinary tap water that it claimed had been purified.

* An apartment complex that required tenants to pay a non-refundable security deposit.

* A Ventura car dealership that turned back odometers on the automobiles it sold.

And, most recently, there was the case against the manufacturer of Milk Duds, which wasn’t putting enough candy in its boxes. That case netted $42,845 in civil penalties and costs to Ventura and Santa Cruz counties, plus a court order prohibiting the company from slack-filling its products in the future.

Assistant Dist. Atty. Colleen Toy White, who oversees the consumer fraud unit, says she is aware that the Milk Duds case provoked a lot of jokes by people who questioned the seriousness of the case.

“The consumer may say, ‘So what?,’ but I can guarantee that manufacturers of like products don’t say, ‘So what?’ ” White said.

The largest civil settlement ever reached by the consumer fraud unit--$250,000--was paid by Nabisco Brands Inc. in 1984 for failing to put enough “Almost Home” cookies in its packages.

White said several factors are considered in deciding how much a company must pay to settle a consumer fraud lawsuit.

“You need to send a message and you have to in some way disgorge the profits,” she said. “Otherwise, companies will make a bottom-line business decision and if the civil penalties aren’t significant . . . it’s a good business decision to continue to rip off the public.”

Beside taking away a company’s profits, prosecutors want to let other businesses know “there are sanctions for illegal conduct,” White said. Every time a case gets publicity, she said, the consumer fraud unit is flooded with calls from other businesses asking if their practices are legal.

Many of the cases that result in lawsuits or criminal prosecution come through complaints to the district attorney’s consumer mediation unit, which is staffed by non-attorneys to help businesses and consumers resolve their disagreements.

Last year the mediation unit received more than 5,600 inquiries and opened 554 cases, according to district attorney statistics. Some of those cases then were brought to the attention of the consumer fraud unit, a staff of four attorneys that also handles environmental cases, White said.

In 1992 the consumer fraud unit filed 14 criminal cases and 12 civil lawsuits, six of them for consumer fraud.

Bill Korth, manager of the county’s Weights and Measures Division, refers many slack-fill and short-weighting cases to the district attorney’s office. He said the Ventura County consumer fraud unit is “probably one of the most aggressive in the state.”

Based on conversations that he has had with other weights and measures officials, Korth said he believes that he has a much easier time getting his cases pursued than his peers in other counties have.

In fact, Korth said, cases have been referred to Ventura County from officials in other counties because “they knew if anybody would get it done, it would be here.”

Dennis Johannes, supervisor for the California Measurement Compliance Program in Sacramento, agreed.

“I’d have to rate Ventura County up there as one of the top,” Johannes said. “Basically, anything brought over there, they’ve picked up the banner and run with it.”

Korth, like White, thinks the consumer lawsuits are significant. In a recent case involving a cheese manufacturer who put one less slice in the package than was advertised, Korth figured that Ventura County consumers spent $80,000 for product they did not receive.

To the average consumer, the loss of one slice of cheese is not significant, Korth conceded. But for the company that has short-filled its package, the profits add up quickly, he said.

White said cases are selected for litigation based on the number of consumers involved, the harm being done, and the profits being collected by the business. Prosecutors have the option of filing criminal charges or a civil lawsuit, but criminal sanctions are reserved for “the down-and-out crook,” she said.

When the mediation unit is flooded with complaints about the same type of service--auto repair, for example--one company will be picked for litigation to get the attention of similar businesses, White said.

“Major corporations are shocked by the stance we’ve taken,” White said. “I’ve had people argue to me as a defense (that) ‘we can get away with that in Los Angeles.’ The response is, this is the law and this is Ventura County. I think the public expects to be protected from things like that up here.”

While Bradbury said he is committed to continuing the consumer unit, he admitted that financial considerations might lead to a reduction in services.

“The fiscal climate of the state and county makes everything a little bit shaky,” Bradbury said.

Eliminating the unit entirely, however, makes no sense because it pays for itself through the civil penalties it collects, Bradbury said. Over the past nine years the unit has generated $2.9 million, according to district attorney figures.

Closing the unit would not give him extra attorneys to assign to violent crime cases, Bradbury said.

“If the revenue disappears, the lawyers disappear, the staff disappears,” he said.

White said cutting the consumer fraud staff would reduce the level of protection afforded to county residents.

“It’s the same effect it would have if you heard that all police officers were being pulled off the street,” White said. “When the cop leaves it’s not the bully on the corner who gets hurt, it’s the senior citizen who gets mugged. The people who are able to protect themselves will continue to protect themselves.”

Top Monetary Judgments

Top monetary judgments obtained by the district attorney’s Consumer and Environmental Protection Division.

COMPANY CATEGORY AMOUNT Nabisco Deceptive packaging $250,000 Nissan Dealers False advertising $200,000 Dream-Away Diet False advertising $162,500 Big 5 Sporting False advertising $125,000 USA Petroleum Contaminated product $120,000 Winston Tire Unnecessary repairs $100,000