Saddsdsdsd

HBR CASESTUDY

lots makes Company Bakíng Southland -from dough that ísdrenched of dough and actívists in trans fats.Nowconsumer wantto takebothaway. hungrylítígators

the Tal(lng Cal(e
by BenCerson

Victorian, I s Hou s e, a handsome stood on a low hill in the bedroom community of Bethesda, Maryland. With a pair of good binoculars he could make out, through any of the three dormer windowsin his finished attic. the distinctive contours of the Capitol dome. It was one of the minor pleasuresof owning this house in this town-at least it had been until last month, when an outsizedinterpretation of the Governor's Mansion in Williamsburg, Virginia, flaunting four chimneys instead of the historically accurate two, fully materialized next door. Its owner was a glad-handing plain-' agetiff's lawyer named Alex Kezenas, career-crowning 64, who had made a killing in 1999.His client wasan r8-yearold West Virginia high school shortstop of who had developeda fatal case tongue

cancer from habitual use of chewing had persuadeda rural tobacco.Kezenas jury to assess actual and punitive damagesagainstthe Old CherokeeTobacco Companytotaling$rz.rmillion. His contingency fee cameto a sixthof that and helped finance the brick obstruction he dwelled in today. Sitting on the edgeof his bed this Sundaymorning, gazingdistractedlyout the window, Peter Schmidt reminded himself that it wasAlex'shousehe minded, not his chosenlivelihood, even though he was in no mood for litigators at the moment. A grandstanding New York lawyer had just sued a packagedfoods company not unlike Peter'sforsupposedly making his client fat. The suit seemedlaughable. But every lawsuit, he thought, no matter how baseless, was a headacheand an expensefor the

)es

dílemmas present managerial common whicharefictíonal, HBR'sceses, experts. solutíonsfrom and offerconcrete

MARCH 2OO4

H B R C A S E S T U D Y ' T a k i n gt h e C a k e

company being sued.Alex was differwas a real health menace'ent. Tobacco More Powerto Alex. The Phone rang. It was Richie Snell, Southland Baking Company'sdirector of government affairs. "Peter, I have a probleml'he said."The House subcommittee on food and drugs is holding hearings tomorrow at 10 AM on child obesity and the fat content of baked goods, and we need to know what's with áoing on. But I've got a sit-down SenatorFullenwiederatthe samehour' evenCan you go?You know the PlaYers

is only one answer-to mandate warning labelson all foodscontainingsugars and saturated fats and to ban advertising of all such products on children's TV programs." Shepausedto bring a bottle of Evian to her lips."Weknow that eating habits get establishedearly. Obese children grow into obeseadults.A diet high in saturated fats often results in heart A HouseDivided? And scienceis beginning to disease. "Hello,Peterl' learn about diet's role in predisposing "Hello, Congressman." people to certain kinds of cancersl'CitThe same exchangeoccurred several ing the work of a Yalemedical professor, up' times as Monday's sessionbroke concluded:"Obesity alone will kill The subcommittee'smembership had she better than I dol' people than alcohol and tobacco verylittle in almost ten years' more "Of course, Richiej' Peter replied' changed thanks to the wonders of incumbency' combinedl' masking his irritation. Surely Richie "Mrs. Newlandl' RepresentativeRay To Peter'spracticed eye,the members have given him a little more warncould a slow-talking New Hampshire had listened with a mixture of amuse- Slocum, ing. The reasonhe hadn't was probably to sounds me likeRepublican,began."It although ment and feigned and genuine concern customaryinattentiveness, hii you're askingus to construct a mommy state, where it's assumedcitizens are unable to inform themselves about AgrandstandínglawyerhadjustsLrcdapackagedfoodswhat's good for them. Since 1990' the makínghísclíentfat' Food and Drug Administration has resupposedly Peter'sfor not company unlíke quired food...