Diamond Foods Reaches Settlement in Walnut False Advertising Case

By Sarah Mirando | January 3, 2012

Category: Legal News

By Mike Holter

California walnut company Diamond Foods, Inc. (NASDAQ: DMND) has agreed to pay $3.45 million to settle a class action lawsuit accusing it of false advertising.

The Diamond Foods walnut settlement will resolve a class action lawsuit, entitled Elliot Zeisel v. Diamond Foods, Inc., that alleges the company misled consumers into believing consuming its walnut products would lead to a healthy heart. This was accomplished through package labeling that claimed its walnuts delivered omega-3 — “fatty acids your body needs for promoting heart health.”

The Diamond Foods walnut class action lawsuit cited a February 2010 letter from the FDA warning Diamond Foods that there is not sufficient evidence to link walnut consumption with heart health and that the company violated food labeling rules by marketing walnuts as if they were intended to treat a medical condition. Diamond ignored the warning letter and refused to remove the false and misleading advertising statements on its labels, the class action lawsuit said.

Diamond Foods continues to dispute that the language it used to promote its walnuts was unlawfully misleading, but has agreed to discontinue the “heart health” claims on its labels and similar materials on its websites.

The company has also agreed as part of the Diamond Foods walnut class action settlement to pay consumers $3.25 to $8.25 for each package of walnuts they purchased since March 22, 2006 that contained the “heart healthy” claims, depending on their size and other conditions.

The Diamond Foods walnut class action settlement must still be approved by a federal judge at the August 2012 Final Fairness Hearing.

Keep checking TopClassActions.com for more information about how to file a claim to receive a cash refund from the Diamond Foods Walnut Omega 3 False Advertising Class Action Lawsuit when it becomes available.