McDonald's Sued Over Happy Meal Toys

NEW YORK ( TheStreet) -- McDonald's ( MCD) is being sued by a California mother of two who claims the fast-food chain's advertising violates California consumer protection laws, luring children into its restaurants by offering toys in its famous Happy Meals.

Because of the popularity of its Happy Meals, McDonald's is one of the top toy distributors in the world. McDonald's is not alone in enjoying the success of kids' meals; chains including Wendy's Arby's ( WEN), Sonic ( SONC), Yum! Brands' ( YUM) Taco Bell and Burger King, among others, also offer free toys in their kids' meals.

The class action lawsuit's lead plaintiff, Monet Parham, filed the lawsuit in December. She is represented by the Center for Science in the Public Interest, a nutrition advocacy group.


Happy Meal toys and other fast-food kids' meals toys have been called into question lately after a New York City councilman, following in the footsteps of a measure adopted in San Francisco last year, proposed that free toys be banned from fast-food meals intended to appeal to children unless the meals meet certain healthfulness guidelines.

Parham admitted she often says "no" to her kids when they ask for Happy Meals, leading McDonald's to counter that "she was not misled by any advertising, nor did she rely on any information from McDonald's."

"In short, advertising to children any product that a child asks for but the parent does not want to buy would constitute an unfair trade practice," McDonald's said, in describing their argument against the lawsuit.

The lawsuit was moved to federal court, though Parham intends to get the case moved back to California.

Stephen Gardner, litigation attorney for the Center for Science in the Public Interest, argued that McDonald's employed an almost-standard method to getting the case dismissed.

"What is different about this motion is that McDonald's has chosen to blame the victim -- saying that it's all Monet Parham's fault if she doesn't force her daughter to ignore the onslaught of McDonald's marketing messages," Gardner said. "McDonald's makes a lot of money by going around parents direct to kids, and it wants to continue with that strategy."


New York City Council member Leroy G. Comrie Jr. said kids' meals, such as those offered at McDonald's and other fast-food establishments, need reduced amounts of fat, salt and sugar if toys are to be included.

He introduced the bill to New York City Council on April 6, arguing that toys only be offered in kids' meals that contain fewer than 500 calories and 600 milligrams of sodium. Fewer than 35% of the calories may come from fat, he said, save for the inclusion of nuts, seeds, peanut butter or other nut-based butters. The meal would also have to include a half cup of fruit or vegetables, or a serving of whole-grain products.

TheStreet asked readers to weigh in on whether the ban was a good idea -- that anything to help fight the battle of childhood obesity is a step in the right direction -- or a bad one -- that banning toys from kids' meals will not do anything to promote healthy eating habits in children. Voters overwhelmingly agreed it was an awful proposal.

A whopping 92.3% of the 194 voters though the bill a bad idea, while just 7.7%, or 15 voters, thought it could help fight childhood obesity.

The city of San Francisco's board of supervisors voted for a similar kids' meal toy banning proposal in November; Santa Clara, Calif. enacted comparable legislation earlier last year.

Comrie's proposal had stricter health guidelines than San Francisco's. In doing so, he declared that "it's important to find a way to make a healthy lifestyle palatable and exciting."

Restaurants caught violating the ban, if it were passed in New York City, would face fines ranging between $200 and $2,500.

Comrie, a Democrat from Queens and self-described busy parent, says his motivation stems from personal guilt about his unhealthy eating habits and the fact that he has purchased many a Happy Meal for his own kids.

Comrie is overweight himself, and hopes the Fast Food Toy Ban Bill will pass, as it did in San Francisco.

"I am an example," he said. "If you look at me. I enjoy fast food and unhealthy eating."

McDonald's and the New York State Restaurant Association are likely not to take this battle lightly.

"This proposal robs parents of choice while increasing the already burdensome regulation on local restaurant owners," said Andrew Rigie, executive vice president of the New York City Chapter of the New York Restaurant Association, according to a New York Times report.

An executive for McDonald's New York region, Mason Smott, said that "taking away toys from kids' meals won't solve childhood obesity."

"Our Happy Meals make it easier for families to choose the right foods in portions just for kids," Smoot said. "We provide options for our customers and trust them to make the decisions that are right for their families. Politicians should, too."

"We are not trying to hurt anyone's bottom line," Comrie said. "We are trying to help people's bottoms."

A reader named Mark asked rhetorically, "Isn't it amazing how politicians just can't take the responsibility in their personal life without making a law out of it?"

Ngregor4 had similar thoughts, asking, "Are they going to outlaw hotdogs at baseball games because hotdogs are loaded with sodium, fat consisting of pork & or beef block scrapings and are mystery meats? What about all of the deep fried whatever at State Fairs? Leave the fast foods and their toys alone."

Big_Poppa argued that, "Government needs to stay out of this. They have other things they should be worrying about."

Tired of it all said "We know how to raise our children and if you don't then let your guilt drive YOU in that direction, not us."

Jude55 worried that, "With all that is wrong with the economy these days we are wasting legislative time and taxpayer money discussing something that should be none of the government's concern. Given the cost of just getting by, a Happy Meal toy may be the only new toy some kids will receive in 2011!"

C6049714 was more lighthearted, musing that "Geez, Bloomberg and the NYC government sure are taking all the fun out of life."

Proponents of San Francisco's ruling argued such a ban might rein in the strong appeal unhealthy kids' meals draw through the offering of shiny new toys.

"If you take away that lusted-after toy then maybe, just maybe, the next generation of children will begin to change in the way we relate to food," noted a blogger on The Independent's Web site in November.

Many considered the city's efforts to curb childhood obesity to be ill-conceived, disagreeing that such a ban would prevent the plight from which between 16% and 33% of American children suffer, according to recent statistics.

McDonald's argued at the time that it should be parents' "right and responsibility -- not the government's -- to choose what's right for their children."

"There are many causes of childhood obesity, including genetic and lifestyle ones," wrote MSNBC columnist and registered dietician Elisa Zied in November, adding that it "takes more than just axing fast foods" to convince children of the benefits of healthy eating patterns. Zied wrote that she was concerned that "ostracizing fatty meals that come with plastic promotional toys could have the unintended consequence of making the product even more appealing."

Others worried about a "nanny state" takeover.

"If government can ban toys from Happy Meals, what else can it do for our own good?" asked AOL News' Bernie Goldberg rhetorically last fall. "Can politicians pass laws that actually require us to eat fruit and vegetables every day? Can they tax Ding Dongs to the point where nobody but Bill Gates can afford to buy them?"

-- Written by Miriam Marcus Reimer in New York.

>To contact the writer of this article, click here: Miriam Reimer.

>To follow the writer on Twitter, go to http://twitter.com/miriamsmarket.

>To submit a news tip, send an email to: tips@thestreet.com.

READERS ALSO LIKE:




>>See our new stock quote page.

Get more stock ideas and investing advice on our sister site, Stockpickr.com.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

If you liked this article you might like

Citi Will Refund $335 Million in Card Charges: LIVE MARKETS BLOG

Citi Will Refund $335 Million in Card Charges: LIVE MARKETS BLOG

Markets Look to Close Week on Strong Note Friday, Build Off Thursday Momentum

Markets Look to Close Week on Strong Note Friday, Build Off Thursday Momentum

Chili's Owner Brinker International Offers a Real Value Menu

Chili's Owner Brinker International Offers a Real Value Menu

How the New CEO of Applebee's and IHOP Plans to Save Iconic Restaurant Chain

How the New CEO of Applebee's and IHOP Plans to Save Iconic Restaurant Chain

Brinker Looks Tasty Even After 7% Rally

Brinker Looks Tasty Even After 7% Rally