$1.5M Nutella False Advertising Class Action Settlement Upheld

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On July 16, The 9th U.S. Circuit Court of Appeals rejected a challenge to the $1.5 million Nutella false advertising class action lawsuit settlement. Three objecting Class Members allege that they were not given proper notice of the requested attorney’s fees. The three-judge panel ruled that the attorney’s fees, which totals about two-thirds of the class action settlement’s value, was appropriate and will not be reversed.

The original Nutella class action lawsuit against food manufacturer Ferrero USA Inc. was filed by California residents Athena Hohenberh and Laura Rude-Barabato on behalf of themselves and a class of California consumers alleging, “Ferrero was misleadingly advertising Nutella as a healthy breakfast food[.]”

Both parties reached a class action settlement agreement of $1.5 million, including a reward for an injunctive relief requiring Ferrero to alter Nutella’s label and advertising campaign. Under the terms of the Nutella class action settlement, $550,000 was used to create a monetary fund for reimbursement of Class Members.

The Nutella class action lawsuit settlement was given preliminary approval on January 23, 2012. The motion for attorney’s fees was filed in May.

On June 8, 2012, objectors Courtney Drey, Andrea Pridham and Michael Hale filed an opposition to the Nutella class action settlement, alleging: “(1) there was inadequate notice of the request for attorneys’ fees; (2) the injunctive relief doesn’t justify a fee award; (3) the district court failed to adequately explain its approval of the fee award; and (4) the district court failed to consider whether class counsel adequately represented the class.”

The objectors also allege that the value of the injunctive relief, on which the attorney’s fees were calculated for the class action lawsuit, is speculative and only benefits “society at large” and not Class Members.

However, the three Class Members’ objection rests on the faulty assumption that the calculated attorney’s fees are based on a percentage of the total settlement fund, which in many cases is limited to 25 percent. In the Nutella false advertisement class action lawsuit settlement, a lodestar method was used instead to calculate the value of the injunctive relief reward, which is determined using multiple factors including time spent on litigation.

According to the appellate court, “the district court did not abuse its discretion in approving a settlement that compensated counsel under the lodestar method for procuring such relief[.]” Additionally, the panel of judges also threw out the objector’s claim that they were not given adequate notification of the attorney’s fees request, stating that all Class Members were given several weeks to file an opposition and did not do so. The judges also disagreed with objectors’ claim that the approved fees were not given sufficient explanation and refused to perform further investigation or scrutiny into the Nutella class action settlement.

The Nutella false advertising class action lawsuit settlement only applies to California consumers, though a similar $3 million Nutella class action settlement was reached in a New Jersey federal court, which covers a broader group of consumers.

Athena Hohenberg, Laura Rude-Barbato, and Class Members are represented by Jack Fitzgerald, Melanie Persinger and Gregory Weston of the Weston Firm, and Ronald A. Marron.

The Nutella False Advertisement Class Action Lawsuit is In re: Ferrero Litigation, Case No. 12-56469, in the 9th U.S. Circuit Court of Appeals.

UPDATE: Viewers of TopClassActions.com are reporting they have received checks in the mail from the Nutella class action settlement. Congratulations to everyone who got paid!

UPDATE 2: Viewers are reporting that they began receiving checks from the nationwide Nutella class action settlement on March 16, 2015. Did YOU get paid? Let us know in the comments section below!