A California federal court has rejected a settlement in a lawsuit that alleged Kellogg Sales Co. misled consumers by marketing its products as “healthy.” Hadley v. Kellogg Sales Co., No. 16-4955 (N.D. Cal., San Jose Div., entered February 20, 2020). The court found the settlement agreement to be invalid for several reasons: (i) “the release of the claims is overbroad”; (ii) the parties did not show that certification was appropriate; (iii) the parties failed “to provide sufficient information to justify a proposed reversion to Kellogg”; (iv) several forms associated with class participation contained errors; and (v) the “settlement structure is currently inconsistent with the fact that the voucher portion of the settlement constitutes a coupon settlement under the Class Action Fairness Act.”

Shook Partner Lindsey Heinz and Associate Elizabeth Fessler wrote an article for Law360 on the settlement when it was announced in late 2019, focusing on the lessons companies can take about “healthy” litigation.

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For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.