Kellogg Settles “Healthy” Cereal Suit for $20 Million

The parties in a lawsuit alleging Kellogg Sales Co. misrepresented its cereals as healthy have reached an agreement that would require the company to pay $20 million in payments and make marketing changes valued at more than $11 million. Hadley v. Kellogg Sales Co., No. 16-4955 (N.D. Cal., filed October 21, 2019). The lawsuit alleged that Kellogg’s Smart Start, Raisin Bran, Krave, Crunchy Nut and Frosted Mini-Wheats cereals, along with its Nutri-Grain bars, were misleadingly marketed as healthy despite containing high levels of sugar. Under the settlement agreement, Kellogg will (i) remove or limit the use of “Heart Health” claims on Smart Start and Raisin Bran; (ii) use “healthy” as an implied nutrient content claim only; (iii) remove “lightly sweetened” from Frosted Mini-Wheats and Smart Start; (iv) refrain from using “No High Fructose Corn Syrup” or an equivalent phrase; and (v) use “wholesome,” “nutritious” and “benefits” or equivalent words only in connection with a specific ingredient or nutrient. Each member of the class will be eligible to obtain vouchers for Kellogg products or a cash refund of half the vouchers’ value.