Cross-posted at WLF’s Forbes.com contributor site
In our June 21 post, “Natural” Selection: Survival of the Litigious, we noted that consumer class action target Ben & Jerry’s decided to settle with the “deceived” plaintiffs once a judge on “The Food Court” (aka the U.S. District Court for the Northern District of California) denied their motion to dismiss. The plaintiffs in Astiana v. Ben & Jerry’s were claiming that because the company used cocoa processed with a synthetic ingredient, it couldn’t lawfully call its ice cream “all natural.”
We learned today (hat tip to Shook, Hardy & Bacon and its excellent Food & Beverage Litigation Update) that presiding Judge Hamilton rejected the settlement on September 12. Ruling from the bench, she found the proposed settlement legally unconscionable. The proposal had set up a $7.5 million fund for the plaintiffs. Under the cy pres doctrine, the court would distribute any amount remaining after plaintiffs had asserted their claims to “not-for-profit charities related to food or nutrition in the United States.” For themselves, the class action attorneys sought $1.8 million in fees.
According to an attorney present at the September 12 hearing, Judge Hamilton stated that she had incomplete information on how the cy pres funds would be rewarded. A Ninth Circuit ruling from last July, Dennis v. Kellogg Co. (see our post on that here) may have given Judge Hamilton pause. The plaintiffs devoted a lengthy footnote (n. 6) in their proposed settlement explaining why their cy pres proposal was not disconnected from the misleading advertising claims, as the appeals court found in Kellogg (there, Kellogg products were to be donated to a food bank). Yesterday, both parties filed a motion with the judge seeking a status conference and noted that they had “new information” to share, so perhaps Ben & Jerry’s and the class action lawyers will provide specifics on the possible cy pres recipients.
Interestingly, one of the members of the nationwide class in Astiana, Illinois resident Colleen Tobin, not only filed an objection to the settlement but has filed her own nationwide class action against Ben & Jerry’s in a New Jersey federal court (Tobin v. Conopco and Ben & Jerry’s). She filed suit September 13, the day after Judge Hamilton rejected the Astiana settlement, alleging that Ben & Jerry’s ice cream was not all natural due to synthetic cocoa and because it contained genetically modified organisms. On September 21, Tobin filed a motion to transfer her suit to—you guessed it—the Northern District of California, where it seemingly could be consolidated with the Astiana class action. It remains unclear whether Ben & Jerry’s will contest the motion.
We will keep an eye on this case to see if it enters The Food Court, and if so, what impact it will have on the settlement of Astiana.