Judge Rejects Proposed Truvia Class Action Settlement

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A Minnesota federal judge has declined to grant preliminary approval to a class action settlement over allegations that Cargill Inc. falsely advertised its Truvia stevia sweetener as “natural” when it contains “highly processed” ingredients or ingredients that are derived from GMOs.

Plaintiffs Molly Martin and Lauren Barry requested preliminary approval of the proposed Truvia class action settlement on Sept. 19, 2013. Cargill also submitted a motion for a stay of litigation in all other courts and an injunction to prevent new actions related to Truvia products from being filed.Both motions were denied by U.S. District Judge Richard H. Kyle on Oct. 29, 2013.

The plaintiffs claim that Cargill misrepresents its Truvia products by advertising that the product is “born from the sweet leaf of the stevia plant.” Further, the company allegedly highlights Truvia as a “natural” product in its marketing, labeling and promotional materials.

Martin initially filed the Truvia class action lawsuit against Cargill on Feb. 12, 2013, and voluntarily dismissed the action on Feb. 28 so that the parties could pursue mediation to resolve their dispute. The next day, Martin’s legal counsel advised Cargill that they were also representing Barry, a California-based plaintiff who alleged nearly identical claims on behalf of a nationwide class, but indicated that they would not file a class action lawsuit on her behalf until mediation was completed in Martin’s action.

The same attorneys representing Cargill in these class action lawsuits are also representing the company in a similar class action lawsuit filed in Hawaii. The lead plaintiff in that case is Denise Howerton.

On Aug. 2, 2013, Cargill reached a class action settlement with Martin and Barry. If approved, the Truvia class action settlement would pay a total of $5 million in cash and vouchers to consumers who purchased certain Truvia products. Under the terms of the class action settlement, Cargill agreed to change the labeling and marketing of its Truvia products. The parties also agreed to release all claims against Cargill related to the company’s marketing, labeling or advertising of Truvia.

Judge Kyle found that there was no indication in the record to suggest that the Hawaii plaintiffs were advised that the class action settlement had been reached in Minnesota. Instead, the plaintiffs sought approval of the class action settlement the day after they filed their complaint. “Only then were the Hawaii court and Howerton notified that a settlement had been reached here,” the judge said. Howerton subsequently objected to the proposed class action settlement. She also objected to Cargill’s proposed stay and injunction.

Typically, the parties engage in some discovery and other preliminary motion practice to determine which type of class action settlement would be fair. “But Plaintiffs sought settlement approval the day after filing their complaint; no formal discovery or preliminary motion practice has occurred.”

“This is not to suggest preliminary approval of a class settlement cannot come early in a lawsuit,” Judge Kyle continued. “To hold otherwise would frequently undermine the opportunity for settlement, because discovery costs can diminish a defendant’s incentive to settle. But where, as here, a court does not possess evidence from which to evaluate the fairness or adequacy of a proposed settlement, it is incumbent upon the parties to ‘supplement’ the record to provide the needed information.”

“And yet the parties seek the Court’s blessing over their settlement,” the judge said. “(T)he proposed settlement is fair, adequate, and reasonable because they say so. The Court cannot approve a settlement on such a rocky foundation.”

The plaintiffs have until Nov. 13 to persuade Judge Kyle that the class action settlement is fair and should be preliminarily approved.

The Truvia False Advertising Class Action Lawsuit is Molly Martin, et al. v. Cargill, Inc., Case No. 13-cv-2563, in the U.S. District Court for the District of Minnesota.

UPDATE: A new $6.1 million Truvia class action settlement was reached. Instructions on how to file a claim for the Truvia settlement can be found here or visit www.TruviaSweetenerLawsuit.com for details.

UPDATE 2: A federal judge granted final approval to the Truvia class action settlement on Nov. 26, 2014.

UPDATE 3: Payments from the Truvia class action settlement were mailed to eligible claimants the first week of May.