Nutella Settlement, Part II
Last Thursday I had a post about the Nutella settlement in New Jersey. In the post, I explained that there had been competing class actions, that the California action had been certified as a statewide (California) class, and that the New Jersey plaintiffs and the defendant had jointly moved for a settlement of the New Jersey putative nationwide class action.
Apparently as I was drafting that post, a second settlement was being announced. Who knew? Last Thursday the parties in the California statewide class action filed a joint motion for preliminary approval of a settlement of that action: In re Ferrero Litig., Case No. 11-cv-00205 H CAB (S.D. Cal.). The California settlement looks a lot like the New Jersey settlement, except the numbers are smaller.
In addition to the monetary relief described below, there is the so-called injunctive "relief." First, the front panel of the Nutella label will have "nutrition keys" indicating the calories, saturated fat, sodium and sugar in a single serving of the product. (Sounds an awful lot like the Nutrition Facts on the back of the label, to me.)
Second, the following phrase will be removed from the back label: "An example of a tasty yet balanced breakfast." It may be replaced with "Turn a balanced breakfast into a tasty one." According to class counsel's brief, this second phrase is "no longer making a direct claim that use of Nutella is consistent with a balanced and healthy breakfast." ARE YOU KIDDING ME?!!!!!
Third, plaintiffs' counsel get to have "non-binding" input on new television advertising.
And fourth, the defendant will make modifications to its website.
For this vital "injunctive relief," class counsel claim entitlement to a fee award of $900,000. Hey, according to class counsel, "the parties vigorously litigated the action for more than ten months."
There is a monetary relief component to the settlement as well. Like the New Jersey settlement, it, too, allows claimants to claim $4 per jar of Nutella up to 5 jars (or $20) total. The entire settlement fund in the California settlement is to be $550,000. Once again, claims administration and notice expenses are to be drawn from the fund. And once again, the class counsel retain the right to make an application to be paid from the fund as well. If not enough money is in the fund to pay all claims, the claimants' claims will be reduced pro rata.
So as I had said before, the fund is the best evidence of the fact that no one was really deceived by the conduct alleged here. Out of the entire state of California, class counsel clearly expect that there will be less than $550,000 in claims. Indeed, they've even made a provision for possible cy pres distribution if, after dipping into the fund for attorneys' fees, claims administration, and what claims actually roll in, there still is a positive balance in the fund.
I'll keep you posted on this bi-coastal breakfast bonanza.
