Kellogg’s Cereal Buyers Seek Approval In Updated Settlement

In California federal court, consumers have asked a judge to approve a revised version of a $20 million Kellogg’s cereal class action settlement. 

Previously, U.S. District Judge Lucy H. Koh had denied approval, saying that there were problems with the terms of the settlement, the proposed Class, and with the consumers’ original complaint. Without Kellogg’s help, the consumers took it upon themselves to revise the terms of the settlement, asking the judge to grant approval.

Judge Koh had denied approval of the settlement in February, challenging a number of its terms. She believed that the terms of the settlement could allow Kellogg’s to reclaim a large portion of the $20 million if the funds are left unclaimed. In her eyes, it would be highly likely that much of the settlement amount would be left unclaimed because Class Members would be required to file benefits claims almost immediately. She also took issue with the way that the settlement aimed to notify Class Members, saying that the proposed notice form did not meet requirements.

Judge Koh had previously certified three Classes that were much narrower than the Class proposed by consumers. Though the consumers had initially aimed to include consumers who had purchased a range of products up to eight years previously, they then whittled this down to smaller subclasses.

The idea of a too-broad Class was also one critiqued by Kellogg itself. The company had argued that some of the labels at issue in the Kellogg’s class action lawsuit were not even present on some of the products included in the proposed Class of items.

The judge later decided to reject the consumers’ attempt at Class certification, saying that their proposed Class was too broad. However, the consumers now argue that the limitations imposed on a Class certified for litigation are not the same as those limitations imposed on a settlement Class. 

In this update to the legal news, consumers filed another request for settlement approval, saying that instead of dealing with all of the problems Judge Koh pointed out in the terms of the settlement itself, they would try to address the issues identified with the proposed Class.

Per the terms of the updated settlement proposal, Kellogg would be responsible for providing monetary benefits to proposed Class Members and making changes to its practices. Reportedly, the company agreed to pay $20 million that would go to cash compensation and vouchers. $12 million of this would go to cash payments for proposed Class Members, and the other $8 million would go toward vouchers for future Kellogg’s cereal products. The company had also agreed to change the labels of some of its products. Allegedly, these label changes could cost around $11 million. 

The customers and Kellogg’s disagrees about the efficacy of the settlement. Reportedly, Kellogg’s says that the current settlement should be scrapped, and did not agree to help change it. Instead, Kellogg’s wanted to create a new settlement. 

Now, the consumers are asking for the court to enforce the terms of the settlement without the company’s help. The consumers state “although some concerns the court raised would have been easier to address with Kellogg’s cooperation, plaintiffs believe they can adequately address those concerns based on the current settlement agreement and without Kellogg’s help.”

Consumers had claimed that Kellogg’s falsely represented products like Raisin Bran, Frosted Mini-Wheats, and Smart Start cereals as healthy, along with other products like Nutri-Grain bars. According to consumers, these products are full of sugar and are not what reasonable consumers consider healthy. They note the deleterious health effects associated with sugar, saying that consumers often seek out healthy products because they believe that they have a range of specific properties, like a low amount of sugar.

Allegedly, Kellogg intentionally played upon consumers’ preference for healthy foods to get them to purchase the breakfast cereal products, while providing them with a less desirable products. Consumers argued that they and many other individuals were financially injured by Kellogg’s alleged misrepresentation of their multiple breakfast cereal products.

Do you prioritize buying healthy foods? How do you determine what to buy? Share your thoughts with us in the comments below.

The Kellogg customers are represented by Jack Fitzgerald, Trevor M. Flynn, Melanie Persinger, and of The Law Offices of Jack Fitzgerald; and by Sidney W. Jackson III of Jackson & Foster LLC.

The Kellogg’s Cereal False Ad Class Action Lawsuit is Stephen Hadley, et al. v. Kellogg Sales Company, Case No. 5:16-cv-04955-LHK, in the U.S. District Court for the Northern District of California.

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