Kellogg Buyers Say Revised $13M False Ad Deal Is Gr-r-reat! (subscription to Law360 required)

  • As previously covered on this blog, a plaintiffs’ class action lawsuit filed in 2016, and certified for three classes of consumers in 2018, alleges that statements such as “heart healthy” and “lightly sweetened” on various Kellogg cereals are false and misleading because the cereals contain 18 to 40 percent added sugar.  While the outcomes have been mixed in other lawsuits involving nutrition-related claims on breakfast cereals, as discussed here, the Kellogg class action appeared to be moving toward a settlement if the litigants could agree on terms that would be acceptable to the court.
  • On March 10, 2021, the plaintiffs asked the court to approve a revised settlement that they say addresses numerous concerns, including high administrative fees, an overly broad class of consumers, and provisions that would allow Kellogg to reclaim millions if consumers do not act immediately.  If approved, the revised settlement would establish a $13 million fund for payment of around $16.09 each to an estimated 16 million households who purchased the covered products between 2012 and May 1, 2020, as well as administrative fees.  Any unclaimed funds would go to a supplemental distribution to consumers or to the American Heart Association and the UCLA Resnick Center for Food Law and Policy, which were also named as cy pres recipients in a preliminarily approved $15 million settlement, discussed here, of similar claims involving Post breakfast cereals.  The revised settlement would also require that Kellogg refrain for at least one year from using claims such as “heart healthy,” which appears on various Raisin Bran and Smart Start cereals, and “lightly sweetened,” which appears on Frosted Mini-Wheat varieties of cereals.
  • Nutrition claims that could imply the product is healthy seem risky for foods with added sugars based on mixed results in recent litigation and uncertainty about when and how FDA 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.