Sure, breakfast may be the most important meal of the day, but can cereal really improve your child’s attentiveness by 20 percent? A class of consumers certainly didn’t think so when they sued Kellogg Co. for making such a claim about Frosted Mini-Wheats. However, the parties were willing to put all this behind them and settle, but the 9th Circuit refused to approve their settlement.
The settlement called for Kellogg to, first and foremost, stop claiming that their wheat squares help kids focus. Then the company would create a $2.75 million fund to be paid to class members, and donate $5.5 million worth of food to charity, to help feed the hungry. A noble goal, perhaps, but the court did not believe that the donations had an adequate nexus to the false advertising claims at the heart of the lawsuit. It would be more appropriate for Kellogg to donate to consumer protection groups, according to the 9th Circuit.
"The settlement provides no assurance that the charities to whom the money and food will be distributed will bear any nexus to the plaintiff class or to their false advertising claims and therefore violates our well-established standards governing cy pres awards," the court wrote.
Read more at the ABA Journal
For other InsideCounsel stories about false advertising, see below: