Why the Laws Policing Menu Fraud Don’t Really Work

In September 2014, the City Attorney’s office in San Diego, California launched a broad investigation into area sushi restaurants. The goal: to weed out establishments that were mislabeling local seafood on menus. Secret shoppers visited restaurants throughout the city, methodically ordering from menus that advertised "California spiny lobster rolls" — a high-end, regional delicacy harvested between October and March that can fetch upwards of $28 per pound. Samples were carefully collected and shipped to a lab for DNA testing. Of the eight shops purportedly serving spiny lobster (and charging spiny lobster prices), DNA testing revealed that all eight were using inferior fish. Pollock and crawdads, which might sell for $5 per pound, were substituted for the pricier lobster meat.

Kathryn Turner, chief of consumer environmental protection for the San Diego City Attorney, wasn’t at all surprised to find restaurants peddling phony lobster. Her unit had been inspired by reports from local commercial fishermen about blatant false marketing, and an earlier independent investigation from the nonprofit organization Oceana, which found widespread seafood fraud in Los Angeles and Orange County. When approached by the City Attorney’s office and representatives for the California Department of Fish & Wildlife, "not a single one of the restaurants was able to show any invoices to say they had had any lobster in their restaurants," Turner says. Based on their findings, the office filed criminal charges, and the offending eateries ultimately paid combined fines of $14,000, plus an additional $5,000 towards the cost of the investigation.

For sushi bars, the difference between a monetary fine and a perfectly legal menu is often a few simple words.

For the sushi bars, the difference between a big fine and perfectly legal menu terminology is often a few simple words. Before Turner and her team accepted a guilty plea, the restaurants were required to update their menus with broader language. "The change could be as simple as ‘seafood roll’ — because ‘seafood’ could mean a number of different things," Turner says. Where the fraud occurred was in claiming the dishes contained 'lobster' and selling the "rolls at a premium price, advertising a premium seafood product," Turner says. "In fact, our consumers were getting inferior substitutes."

Restaurants from big chains to independent operators increasingly lure diners with Portlandia-esque menus declaring their "organic," "locally-sourced," "cage-free," "wild-caught," and premium Wagyu beef status. But enforcement of Truth in Menu laws — which, along with Deceptive Trade Practices laws and other regulations set by the FDA and USDA, are meant to regulate menu claims — have not kept pace. That makes it difficult for the average consumer to determine the authenticity of ingredients, and easier for some dishonest restaurant operators to serve inferior product at higher prices.

"It’s often hidden so well it's really difficult to detect," Turner says of food fraud. "The issue is that you really don't have a lot of local enforcement for false advertising." Truth in Menu laws are policed by a complicated web of local and state agencies, and as a result, prosecuted cases like the San Diego case are rare. Menu fraud is a pervasive problem, but the complex web of agencies charged with regulation means many cases fall through the cracks.

Photo: Piyato/Shutterstock

What Are Truth in Menu Laws?

"If a restaurant charges a consumer for a particular product and advertises for that particular product, then they need to deliver that particular product," says Stephen Barth, an attorney and professor of hospitality law at the University of Houston. While most cities, states, and municipalities have laws like this to protect consumers, they’re not necessarily referred to as Truth in Menu laws. Deceptive Trade Practices, the broader set of laws applied to litigate everything from menu fraud to supplements, are often investigated using another layer of federal rules as a litmus test. The FDA and the USDA, for example, thoroughly define common food descriptions like "organic" and "cage-free," as well as items harvested from highly specific regions such as Gulf Coast redfish or Kobe beef.

But as Barth points out, for items without specific designations, "it gets a little challenging to define some of these terms." Take a vague description like "fresh-squeezed": While a diner might assume that refers to juice squeezed daily on the restaurant premises, the restaurant or food distributor might argue that juice "fresh-squeezed" off the tree and then frozen would meet the same standards.

"The bigger challenge from a consumer perspective is being able to notice when an item is not what it's supposed to be," Barth says. When it comes to determining whether a restaurant is violating Truth in Menu laws, the onus is usually on the consumer, a whistleblower, or a group like Oceana to prove customers were duped and that the gap between what consumers spent and what they received was significant. "What are the damages if the orange juice was not squeezed on the premises?" Barth asks rhetorically. "That's why it's difficult to hold restaurants accountable who don't serve what they say they're serving." In these cases, the plaintiff's main goal is usually to embarrass the restaurant into fixing its practices and perhaps to recover attorney fees.

Who Enforces Truth in Menu Laws?

Truth in Menu laws have been around since at least the early 1920s. Larger cities, where restaurants tend to be more regulated, have also historically enacted tighter rules scrutinizing restaurant menus. In his syndicated food column from 1977, James Beard heralded a new "revolutionary development" in the enforcement of Truth in Menu laws in Los Angeles. According to Beard, restaurant inspectors were charged with "rigorously" applying the law:

The inspectors have found some startling examples of duplicity. For instance, in a high-priced restaurant where fish was among the specialties, they found five of these specialties were not made of the fish on the menu, but of dolphin imported from China. Fried scallops were not scallops, but neatly shaped chunks of shark meat.

Violators could receive fines up to $2,500 for attempting to pass a less expensive variety of blue cheese for Roquefort. As Beard wrote, "Colorado mountain trout must come from Colorado mountain streams, Maine lobster from Maine. Steaks listed as ‘charbroiled’ must be broiled over charcoal," and reheating steaks in the microwave is "not permitted."

In contrast, elsewhere in the U.S. that same year, cities and states were struggling to close loopholes and legislative gaps that allowed restaurants to misrepresent food on their menus. A reporter from the New York Times found that despite having Truth in Menu laws since 1922, New York City legislators were not familiar with how to police menu fraud. Likewise, the NYC health department charged with identifying those violations had failed to find any discrepancies between ingredients, preparation, and menu descriptions during a three-year period beyond "food falsely claimed to be kosher, and a few restaurants that served oleomargarine without a special permit."

Contrast that with today’s regulations, and not much has changed. Today, the LA County Health Department conducts Truth in Menu investigations at restaurants: Under the "Good Retail Practices" section of their inspections, inspectors check for whether or not food is "properly labeled & honestly presented." (These mandatory health inspections make sure food is properly labeled with correct weights, proper names, and terminology.) There are now a host of new tools, including DNA testing, available for those wishing to definitively rule whether an ingredient is being falsely advertised.

But enforcement of Truth in Menu laws is still unevenly applied, with a far greater focus on sanitation than fraud. More substantial Truth in Menu cases tend to focus on big-ticket food items like seafood, claims related to kosher menus, and lawsuits against restaurants whose food does not meet the standard of "fit for consumption." This legal lingo relates to mass food-poisoning outbreaks like the recent Chipotle E. coli fiasco that sickened customers in multiple states and the salmonella outbreak at high-end chain Fig & Olive. "That's where the real damages are," Barth says.

What Is Being Done to Improve Enforcement?

"I think really what it comes down to are the laws themselves vary so much from jurisdiction to jurisdiction, and that's not just on a state or county basis — but even from town to town," says Michael Wood, an attorney who represents New York-based restaurant groups and operators. The "haphazard" enforcement and a lack of uniformity is not only problematic for consumers and government officials, but also for restaurants who wish to comply to the laws, he says.

Photo: Piyato/Shutterstock

In the absence of consistent policies, diners and restaurants trying to operate in a transparent way end up footing the bill. In order to make a food fraud case, the consumer is "going to have to have some basis for actually really knowing that you were being sold something that was different than what was advertised on the menu. In order to prove that, the consumers are really going to have to do their homework, whether it's through testing or researching sources," Wood says.

"It's one thing to have a law, it's another thing to enforce it," says Sally Greenberg, director of the National Consumers League, an organization that supports the strengthening of labeling and Truth in Menu laws. Greenberg says in recent years she’s observed a "heightened interest" among consumers in closing enforcement gaps and holding restaurants accountable for what they serve.

A larger, standardized organization tasked with inspecting restaurants (in the same vein as the FDA and USDA) might also bring more control and unity to the task of menu fraud enforcement. In the United Kingdom, restaurant industry food inspections fall under the jurisdiction of a blanket government organization called the Food Standards Agency that, among other things, inspects menus and labels to "make sure the description is not misleading for customers."

Labeling and certification for specific varieties of highly sought after foods can also help diners tease out deceptive practices at restaurants. The Maryland Department of Natural Resources, for example, provides a True Blue certification with special decals and symbols for restaurants that want to promote their use of real, locally-sourced crab meat. The businesses are then listed on a map. Marbled Japanese Kobe beef is also highly regulated to the point where diners can easily avoid fakes.

"We've got misbranded products on the federal and the state side," Turner says. "We've got adulterated products on the federal and state side, but really the missing piece is the enforcement." In the meantime, it’s up to the diner to be vigilant about the food they order by educating themselves about the foods and phraseology that are more often targeted for fraud. "I think most restaurants do it the right way," Barth says. "As with anything, it's the restaurants trying to cut corners that give everybody a black eye."

Brenna Houck is editor of Eater Detroit and weekends editor of Eater.com. Vance Lump is a freelance illustrator based in the Pacific Northwest.
Editor: Erin DeJesus

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