Kellogg Sales Company has agreed to shell out $20,250,000 to settle “hotly contested” class action litigation over the company’s claims that some of its sugar-laden cereals are healthy.
In addition to the more than $20 million in cash and vouchers for consumers, the plaintiffs were able to secure $11,257,000 in “measurable future savings” due to marketing changes Kellogg’s has promised to implement for some of its products. A hearing on preliminary approval of the settlement is tentatively scheduled for March 12, 2020 at the federal courthouse for the Northern District of California in San Jose.
Which Kellogg’s products are covered by the settlement?
The proposed settlement applies to Kellogg’s Raisin Bran, Frosted Mini-Wheats, Smart Start, Crunchy Nut and Krave cereals, as well as Nutri-Grain snack bars.
Who’s covered by the settlement?
The proposed settlement, which awaits preliminary approval from U.S. District Court Judge Lucy H. Koh, covers consumers across the United States who bought any of the products listed above for household use between August 29, 2012 and October 21, 2019.
What are the terms of the deal?
According to court documents, Kellogg’s will establish a fund to provide consumers with upward of $20 million in combined cash and voucher compensation. Consumers will be able to choose between receiving either cash or a voucher as their piece of the settlement. The amount that a consumer may receive will depend on how many covered Kellogg’s products were purchased (discussed in more detail below).
Significantly, Kellogg’s has agreed to implement what’s known in the legal field as “prospective injunctive relief” estimated to be worth $11.25 million in measurable savings. Injunctive relief is essentially a special court order to compel a company to engage in—or refrain from—specific conduct.
As part of the deal’s injunctive relief, Kellogg’s has agreed to modify the labels of the products stated earlier in this post to “address the concerns” raised by the plaintiffs in their lawsuit. The proposed settlement documents say Kellogg’s has agreed to:
Remove or modify “Heart Healthy” claims for Smart Start and Raisin Bran cereals as long as more than 10 percent of the products’ calories come from added sugar. For Smart Start, Kellogg’s has agreed to “remove and, for a period of no less than two years, not use any heart health references” on the cereals’ packaging. For Raisin Bran, Kellogg’s will limit its use of “heart health claims” to “approximately the bottom half of the principal and reverse display panels.”
Remove from packaging for a period of no less than three years claims that Frosted Mini-Wheats and Smart Start cereals are “Lightly Sweetened.” This applies as long as more than 10 percent of the products’ calories per serving come from added sugar.
Remove “No High Fructose Corn Syrup” claims and similar statements from the packaging of each cereal mentioned above for a period of no less than three years, so long as more than 10 percent of the product’s calories per serving comes from added sugar.
Use, for a period of no less than three years, only the words “wholesome,” “nutritious,” or “benefits” in connection with a specific ingredient or nutrient. Additionally, Kellogg’s is prohibited by the settlement from using any of the three words to describe the cereals if more than 10 percent of a product’s calories per serving come from added sugar.
Ultimately, the parties negotiating the settlement have reasonably estimated consumers will save upward of $11.2 million as a result of the label revisions described above.
How do I get my piece of the settlement?
To file a claim, you must fill out and submit an online form available on a to-be-created settlement website. When this website is up and running, we’ll let you know. For the latest developments, sign up for ClassAction.org’s newsletter.
You will be required to identify which of the six Kellogg’s products you purchased between August 29, 2012 and October 21, 2019. For each product, you’ll be asked to state the number of purchases in the preceding three months and the year you began buying the product.
From there, the settlement documents say, an “equation running ‘behind the scenes’” will calculate your “base refund” amount.
Depending on the amount of your “base refund,” you’ll be placed into one of four “buckets,” with each bucket designating the standardized initial refund offer in both voucher and cash value. The documents for the proposed settlement offer the following table breaking out each consumer “bucket.”
Once the tally is completed, the consumer will then have to choose either the cash or the voucher offer.
Note: If claims for cash exceed or are less than the money remaining in the settlement’s cash fund after all expenses have been subtracted—or if the number of voucher claims exceeds or is less than the amount set aside in the voucher fund—supplemental distributions or pro rata reductions may apply. In short, don’t be surprised if the amount you receive from the settlement is less than what you claim.
What can I use a Kellogg’s voucher for?
Vouchers can be used to buy the following Kellogg’s products from any retailer:
Variety 10-Pak; Fun 8-Pak; Raisin Bran (all five flavors); Smart Start; All Bran (all three flavors); Crispix; and Mueslix.
Note: Product vouchers obtained through the settlement expire four months after issuance. Moreover, their value must be used in a single transaction, and any unused value will be forfeited.
Consumers who wish to opt out of the settlement will be able to do so by downloading the official opt-out form from the forthcoming settlement website and submitting the form by mail to the administrator, Postlethwaite & Netterville (P&N). Those who wish to object to the settlement must file and serve a written objection by the to-be-determined deadline.
What’s next? When will I get my money?
We still have a ways to go before claims can be filed and settlement benefits are distributed to consumers. The settlement detailed on this page is only a proposed settlement—and still requires preliminary approval by a judge. It’s entirely possible that some of the specifics of the settlement change between now and then.
For now, all consumers can do is sit tight. ClassAction.org will update this post when anything new arises.
The document outlining the proposed settlement is embedded below.