The plaintiffs litigating a false advertising case concerning the amount of sugar contained in certain Kellogg Sales Company’s cereals submitted a motion for preliminary settlement approval on Wednesday. The new settlement reportedly improves on the last by tailoring certain provisions, like the release of claims and class products, more narrowly.
The motion, filed in the Northern District of California, explains that the parties’ proposed settlement has been denied twice, in February and in November 2020. The first time, the court took issue with five different aspects of the agreement. The cause of the most recent denial was the court’s concern with the release language and with the settlement’s ability to meet the predominance requirement of Federal Rule of Civil Procedure 23(b)(3) given the scope of the settlement class. Subsequently, the parties continued settlement discussions and reached the agreement now before the court.
The instant motion presents a settlement that the parties “believe directly addresses the Court’s previously-voiced concerns.” First, the motion claims, the settlement is now expressly limited to releasing only claims based on the identical factual predicate, or depending on the same set of facts alleged. Second, the filing explains, the settlement class now limits class products, addressing the court’s concern regarding predominance.
Third, the parties eliminated the previous settlement’s voucher component, while the cash component has been increased by $1 million. The parties assert that the $13 million non-reversionary common fund is now more economically favorable to settlement class members because of the aforementioned limitations.
The settlement agreement also purportedly provides injunctive relief. Previously, in the October 2019 settlement, Kellogg agreed to remove or revise certain claims on products’ labels. Reportedly, anticipating that the settlement would be approved, Kellogg undertook and completed that process in April 2020. In the current settlement, Kellogg has agreed to refrain from using labels like “heart health,” “lightly sweetened,” and “nutritious,” among others, on certain products for another year.