Bureaucrats in one California county apparently haven't used any tools more complicated than a pocket protector: they recently charged home improvement retailer Lowe's (NYSE:LOW) with consumer fraud for selling 2x4 lumber that wasn't 2"x4" in size.
Of course, as just about anyone who's ever picked up a hammer knows, dimensional lumber -- the stuff commonly used to frame and build houses and make projects -- isn't actually the size listed, but about a half-inch smaller all the way around. That's because lumber mills take rough-cut lumber and shape and smooth it to a standardized size. Thus a 2x4 piece of wood is actually 1.5"x 3.5", a 2x6 is actually 1.5"x 5.5", and so on.
It's a convention used across the industry, and if you walk into any lumberyard or home center anywhere in the country you will find this exact same sizing.
Except the bureaucrats in the Marin County, Calif., weights and measures department were shocked -- shocked! -- to find this out, and initiated a civil enforcement action against Lowe's for unlawfully advertising the building materials using their dimensional size, rather than the nominal, rough-cut size. The home supplies center has been ordered to pay a $1.6 million settlement.
Corporations across the country are facing a rising wave of frivolous lawsuits every bit as idiotic as the one against Lowe's, though usually they're perpetrated by trial lawyers looking to reach their hands into someone else's deep pockets.
It's become common for lawyers to push their shopping carts down the aisles of grocery stores and pick off products to test novel legal arguments. That's why we've seen a proliferation of lawsuits against companies like WhiteWave Food, Kellogg, and Trader Joe's for using the term "evaporated cane juice" instead of "sugar;" and why PepsiCo, Whole Foods Market, and Kellogg have been sued for selling "all natural" foods and beverages that contain processed ingredients like high fructose corn syrup. Even Subway has been sued because its "footlong" subs were only 11 inches.
This plague of litigiousness is unnecessarily wasting financial resources while increasing costs for consumers.
It's also why we end up with stupid labels on products, including the warning on a cup of coffee that its contents may be hot; that you shouldn't handle the chain end of a chainsaw; that you shouldn't use a hair dryer while you sleep; not to drive with a sunshield in place; and to wear safety googles while using a letter opener.
McDonald's was smart enough to head off potential problems by noting that its Quarter Pounder hamburger is actually named for its precooked weight.
Not only are these companies protecting you from yourself, but they're attempting to ward of lawsuits from plaintiff lawyers who will sue because you lack common sense. Unfortunately for Lowe's, it was the government itself that adopted these tactics.
What's surprising is why the home center agreed to settle. Lowe's says it allows the company to move forward to "meet our shared goals." All too often companies decide it's simply cheaper to settle these cases instead of fight them, but -- though it can be costly in the short term to crusade against frivolous lawsuits -- acquiescing only emboldens lawyers to continue to file more bizarre lawsuits down the road.
Lowe's certainly had a strong case for an appeal. Lumber, when it's rough cut and going through the drying process, will experience shrinkage. A nominal 2x4 may not actually be that size. Which is why the industry has taken to planing the wood to a uniform standard. Lowe's wasn't saying that's what size the lumber was, it was posting what its suppliers said the size is.
While the settlement does preclude Lowe's from having to measure every piece of wood that comes into its home center -- sanity at last! -- it still mandates that, in addition to the monetary penalty, it must post signs listing both the common size that everyone but California bureaucrats understands, as well as the actual lumber dimensions.
However, it's further forbidden from using common sizing symbols like " for inches and ' for feet; instead it has to use the words "inch" and "feet."
People outside of California often shake their heads in wonderment at what passes for reason in the state. The bureaucrats solved a problem that didn't exist, and consumers aren't any more protected than they were before.
Lowe's isn't going to be particularly put out by paying the fine and complying, but it does serve as a warning: the cost of doing business in California is going up, and the hostile environment these nuisance cases create simply discourages businesses from locating or starting there.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Rich Duprey owns shares of WhiteWave Foods. The Motley Fool recommends McDonald's, PepsiCo, WhiteWave Foods, and Whole Foods Market. The Motley Fool owns shares of PepsiCo, WhiteWave Foods, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.