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The Role of Nonlegal Sanctions in Overcoming Fraud Within the Kosher Food Inducstry

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The Role of Nonlegal Sanctions in Overcoming Fraud Within the Kosher Food Inducstry Florida State University Law Review Volume 31 Issue 3 Article 4 2004 Kosher Without Law: The Role of Nonlegal Sanctions in Overcoming Fraud Within the Kosher Food Inducstry Shayna M. Sigman [email protected] Follow this and additional works at: https://ir.law.fsu.edu/lr Part of the Law Commons Recommended Citation Shayna M. Sigman, Kosher Without Law: The Role of Nonlegal Sanctions in Overcoming Fraud Within the Kosher Food Inducstry, 31 Fla. St. U. L. Rev. (2004) . https://ir.law.fsu.edu/lr/vol31/iss3/4 This Article is brought to you for free and open access by Scholarship Repository. It has been accepted for inclusion in Florida State University Law Review by an authorized editor of Scholarship Repository. For more information, please contact [email protected]. FLORIDA STATE UNIVERSITY LAW REVIEW KOSHER WITHOUT LAW: THE ROLE OF NONLEGAL SANCTIONS IN OVERCOMING FRAUD WITHIN THE KOSHER FOOD INDUCSTRY Shayna M. Sigman VOLUME 31 SPRING 2004 NUMBER 3 Recommended citation: Shayna M. Sigman, Kosher Without Law: The Role of Nonlegal Sanctions in Overcoming Fraud Within the Kosher Food Inducstry, 31 FLA. ST. U. L. REV. 509 (2004). KOSHER WITHOUT LAW: THE ROLE OF NONLEGAL SANCTIONS IN OVERCOMING FRAUD WITHIN THE KOSHER FOOD INDUSTRY SHAYNA M. SIGMAN* I. INTRODUCTION ............................................................................................ 510 II. THE THREE CS OF KOSHER FOOD: CONTENTS, CERTIFIERS, AND CONSUMERS ................................................................................................ 514 A. Defining Kosher.................................................................................... 517 1. Kosher Food Sources and Ingredients ........................................... 518 (a) Mammals................................................................................. 518 (b) Poultry or Fowl........................................................................ 519 (c) Fish, Marine Life, and Invertebrates....................................... 519 2. Kosher Food Preparation ............................................................... 520 (a) Preparing Animal-Sourced Food............................................. 520 (b) Food and Utensil Absorption/Transference............................ 521 3. Impermissible Food Combinations ................................................ 522 B. The Supervision and Certification Industry ........................................ 523 1. Who Certifies Kosher Food? ........................................................... 524 (a) Identifying Organizations and Symbols.................................. 525 (b) What Certifiers Do ................................................................... 528 2. The Role of Competition and Policing Within the Certification Industry .................................................................... 530 (a) KSA Competition ..................................................................... 530 (b) Who Polices the Certification Industry? .................................. 534 C. The Kosher Consumers......................................................................... 536 1. Observant Jews.............................................................................. 538 2. Other Religious Minorities............................................................. 540 3. People with Food Allergies, Sensitivities and Intolerances ........... 543 4. People with Vegetarian, Vegan, Other Morally-Based, or Health-Conscientious Related Diets............................................... 544 III. EXISTING SANCTIONS & ENFORCEMENT SCHEMES ..................................... 545 A. Tier One Enforcement: Reputation-Based Nonlegal Sanctions ........... 547 B. Tier Two Enforcement: Private Law Remedies.................................... 548 1. Consumer Remedies....................................................................... 548 2. KSA Remedies................................................................................ 550 C. Tier Three Enforcement: Consumer Protection Laws .......................... 550 1. Laws of General Application.......................................................... 550 2. The Kosher Fraud Statutes............................................................ 551 (a) The History .............................................................................. 551 (b) The Legal Content.................................................................... 552 (c) The Constitutional Question.................................................... 554 IV. HOW EFFECTIVE ARE THE VARIOUS SANCTIONS: THEORY VS. PRACTICE .... 557 A. Predictions About the Market............................................................... 557 1. The Profit Motive & the Detection Problem ................................... 557 * Associate Professor of Law, University of Minnesota Law School. In the name of full disclosure, I must note at the outset that I am an observant Jew who attempts to ad- here to a strict kosher diet. I would like to thank Michael Broyde, Guy-Uriel Charles, Jim Chen, Dan Farber, Richard Frase, Dan Gifford, Brett McDonnell, and Eric Posner for their helpful comments and suggestions. I benefited from the superb research assistance of Mat- thew Lillvis, Michelle Lo, and Sumbal Mahmud. In addition, I am extremely grateful to Jonathan Sigman, a.k.a. the creator of the Mr. K-asebook, for all his help. 509 510 FLORIDA STATE UNIVERSITY LAW REVIEW [Vol. 31:509 2. The Expected Deterrence Effects of the Various Sanctions............ 558 (a) Comparative Cost of Operation ............................................... 559 (b) The Nature of the Penalty........................................................ 560 (c) Duplication Among Sanctioning Systems ............................... 561 B. Evaluating the Market ......................................................................... 562 1. Observations About Enforcement................................................... 562 (a) Tier One: The Nonlegal Sanctions........................................... 562 i. KSA Activity ...................................................................... 562 ii. Consumers and Consumer Watchdogs.............................. 565 (b) Tier Two Enforcement: Private Law Remedies ....................... 566 (c) Tier Three Enforcement: Consumer Protection Laws.............. 568 i. The Shelat Example .......................................................... 568 ii. Kosher Fraud Statute Enforcement................................... 571 2. Other Market Observations............................................................ 576 (a) Role of Mistake ........................................................................ 577 (b) Too Many Marks...................................................................... 578 (c) International Fraud or Theft of Intellectual Property............. 580 (d) Left-Out Consumers................................................................. 581 C. A Proposal for Kosher Fraud ............................................................... 582 1. Networking Opportunities ............................................................. 584 2. Disclosure Models—New Jersey & Other Options......................... 587 V. BEYOND KOSHER FRAUD ............................................................................. 590 A. Consumer Protection Examples ........................................................... 590 1. Other Food Subindustry Applications........................................... 591 (a) Halal Food............................................................................... 591 (b) Allergy-Safe Food .................................................................... 593 (c) Organic or Nongenetically Modified Food............................... 594 2. Lessons for and from Consumer Safety ......................................... 596 B. Extrapolating from Kosher................................................................... 598 VI. CONCLUSION ............................................................................................... 601 I. INTRODUCTION What is the appropriate legal response to “Order Without Law”?1 That is, should laws change when private actors—for example, or- ganizations, trade industries, and institutions—develop their own law through extralegal, or to be more accurate, nonlegal customs and practices? At first glance, this question might seem analogous to a tree falling in the forest. When private actors opt out of legal en- forcement mechanisms, such as court enforcement of tort or contract, there is no invitation for law to act; therefore, the content of the legal rule not chosen appears moot. Recent empirical scholarship exploring nonlegal systems, whether it is focused on cattle ranchers in Shasta County2 or diamond merchants in New York City,3 often relies on a 1. ROBERT C. ELLICKSON, ORDER WITHOUT LAW: HOW NEIGHBORS SETTLE DISPUTES (1994). 2. Id. at Part I. 3. Lisa Bernstein, Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry, 21 J. LEGAL STUD. 115 (1992); Barak D. Richman, Community Enforcement of Informal Contracts: Jewish Diamond Merchants in New York (Sept. 2002) (unpublished manuscript, on file with John M. Olin Center for Law, Economics, and Busi- 2004] KOSHER WITHOUT LAW 511 premise that “[l]aw simply [does] not matter in a community with well developed norms.”4 But what happens when law needs no invitation? Often, the deci- sion to opt out of criminal and civil enforcement schemes does not rest in the hands of
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