Post Sugary Cereal Buyers Get Ok on $15M False Ad Deal (subscription to Law360 required)

  • On February 24, 2021, a California federal judge tentatively approved a settlement over nutrition-related claims for breakfast cereal whereby Post would establish a $15 million non-reversionary common fund to compensate a nationwide class of consumers who purchased Raisin Bran, Honeycomb, Honey Bunches of Oats, or Waffle Crisps, and Post would  also refrain from using claims including “less processed,” “no high fructose corn syrup,” “natural,” and “wholesome” on boxes of cereal where 10% or more of the calories come from added sugar.  An award for fees, costs, and expenses will be determined in a final hearing scheduled for June 23, 2021.
  • The same team of attorneys also filed proposed class action lawsuits in 2016 with a common lead plaintiff in the Northern District of California against cereals marketed by General Mills and Kellogg involving similar false-advertising claims.  As we previously reported, the case against General Mills was dismissed in June 2020, based on the judge’s finding that plaintiffs could not possibly have been misled because the amount of sugar in the cereals is clearly disclosed on the product labels.  Further, a settlement has not yet been reached in the class action lawsuit against Kellogg (subscription to Law360 required).
  • Although legal results are mixed, and complex issues surround the impact on health of added sugars in a single product and a product’s role in the total diet, nutrition claims that could imply the product is healthy seem risky for foods with added sugars.  Meanwhile, FDA has not indicated how it will act on a citizens petition (discussed here) requesting a regulation to establish disqualifying levels of added sugar that would prohibit the use of a “healthy” claim.