A federal court in Minnesota has granted the motion for summary judgment filed by a company whose insurance carrier claimed it was not required to cover the company’s settlement of claims arising from a recall of instant oatmeal purportedly contaminated with instant milk produced at a facility where the Food and Drug Administration “detected insanitary conditions and salmonella.” The Netherlands Ins. Co. v. Main St. Ingredients, LLC, No. 11-533 (D. Minn., decided January 8, 2013). The company had supplied the instant milk to Malt-o-Meal which used it to make instant oatmeal. After the instant milk and downstream products such as the oatmeal were recalled, Malt-o-Meal sued both the supplier and the company that had produced the instant milk. While none of the supplier’s instant milk was found to contain Salmonella, the case ultimately settled for $1.4 million. The insurance company sued the supplier, Main Street Ingredients, for a declaration that…
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A federal court in New Jersey has found that most of the named plaintiffs in putative class actions consolidated in a multidistrict litigation (MDL) proceeding lack standing to pursue claims that General Mills, Inc. violated consumer fraud laws by claiming that its Cheerios cereal products reduce cholesterol, the risk of heart disease and certain forms of cancer. In re Cheerios Mktg. & Sales Practices Litig., No. 09-2413 (D.N.J., decided September 10, 2012) (unpublished). Under a choice-of-laws analysis, the court found that California, New Jersey and New York law applied to the claims and thus dismissed four counts alleging violations of Minnesota law. The court also found that most of the named plaintiffs consumed the cereal for reasons other than health benefits, did not know what the cereal cost or had not read the product labels. Accordingly, the court granted the company’s motion for summary judgment as to five of the named plaintiffs.…
The Ninth Circuit Court of Appeals has withdrawn its previous opinion reversing an order that approved the settlement of class claims against Kellogg Co., although it has reached the same conclusion in its new opinion. Dennis v. Kellogg Co., Nos. 11-55674, -55706 (9th Cir., decided September 4, 2012). Information about the withdrawn opinion is included in Issue 447 of this Update. The plaintiffs claimed that Kellogg lacked supporting scientific evidence for marketing and promotional statements that some of its cereal products could improve children’s cognitive functions. Apparently, the court had failed to consider the plaintiffs’ preliminary argument that it could not address the validity of the cy pres distribution of funds that remained in the settlement fund. They contended that the issue “will not be ripe until it is determined that available cash remains in that fund after the claims process has concluded.” As the court observed in a footnote…
The Ninth Circuit Court of Appeals has found the proposed cy pres distribution inappropriate and unacceptably vague and the attorney’s fees unreasonable in a settlement of class claims that the Kellogg Co. violated consumer protection laws by advertising its Frosted Mini-Wheats® cereal as a product that was clinically shown to improve children’s attentiveness by nearly 20 percent. Dennis v. Kellogg Co., Nos. 11-55674, -55706 (9th Cir., decided July 13, 2012). Additional information about the case appears in Issues 368 and 392 of this Update. The company’s settlement of related false-advertising charges filed by the Federal Trade Commission is discussed in Issue 301 of this Update. Under the agreement, class members could recover up to a maximum of $15, and any remaining funds would be donated to “charities chosen by the parties and approved by the Court pursuant to the cy pres doctrine.” According to the court, about $800,000 had been…
Yale University’s Rudd Center for Food Policy and Obesity has issued a report claiming that cereal companies “have improved the nutritional quality of most cereals marketed directly to children, but they have also increased advertising to children for many of their least nutritious products.” Titled Cereal F.A.C.T.S. Food Advertising to Children and Teens Score, the report analyzes the nutritional quality of more than 100 brands and nearly 300 individual varieties of cereal marketed to children, families and adults while examining industry advertising on TV, the Internet and social media sites. According to the report, while nutritional quality improved for 22 cereal brands advertised to children in both 2008 and 2011, total media spending to promote child-targeted cereals increased by 34 percent during that same time period. Among its findings, the report concludes that (i) “Children viewed fewer TV ads for 7 of 14 child-targeted brands, including Corn Pops and Honeycomb”; (ii)…
“Ready-to-eat cereals are the fourth biggest source of added sugars in Americans’ diets, behind sugary drinks, desserts, and candy,” opine Center for Science in the Public Interest Director of Nutrition Policy Margo Wootan and New Balance Foundation Obesity Prevention Center Director David Ludwig in this article, disputing claims that children who eat sugary cereals for breakfast are less likely to be overweight than those who do not eat breakfast at all. According to Wootan and Ludwig, the research supporting such claims “cannot prove cause and effect, and most have been funded or conducted by the industry.” They argue instead that manufacturers should market their lower-sugar offerings to children as well as adults, citing studies conducted by Yale University’s Rudd Center for Food Policy and Obesity that show such products “are well accepted by children” even though cereals targeted to youth typically “contain 85 percent more sugars and 65 percent less…
The U.K.’s Advertising Standards Authority (ASA) has censured Kellogg Marketing and Sales Co. (UK), Ltd. for falsely claiming on its website, in relation to promotions for children’s breakfast cereals, that “A panel of world health experts recently reviewed all the scientific evidence and concluded that a high sugar intake is not related to obesity, or the development of diseases such as heart disease, diabetes, high blood pressure or cancer.” ASA acknowledged that Kellogg’s had based the claim on “credible scientific evidence and review,” but noted that the company’s wording, without qualifiers, did not account for contrary evidence and “implied there was absolute certainty about the claims being made,” which is not the case. Because Kellogg’s had “referred in particular to a high sugar intake,” ASA concluded that the claim was misleading given the number of authoritative government cautions about limiting the quantity of sugary foods consumed. The company apparently assured…
A federal magistrate judge in Illinois has stayed a putative class action, the fourth of five brought against The Quaker Oats Co., alleging that the company deceives consumers by representing that its granola and oatmeal products are “heart healthy,” “wholesome,” and a “smart choice made easy,” when they actually contain trans fat. Askin v. The Quaker Oats Co., No. 11-111 (N.D. Ill., order entered February 15, 2012). The named plaintiff, a New York resident, filed his complaint on behalf of a putative nationwide class after other similar suits were filed in California, where they are proceeding as one consolidated action. He unsuccessfully sought to consolidate all of the action in Illinois before a multidistrict litigation court. Quaker and the intervening plaintiffs, who filed the California actions, asked the court to dismiss the Illinois action under the first-to-file rule, and the court denied the request despite finding that the suits are…
The Environmental Working Group (EWG) has issued a December 2011 report claiming that many popular cereal brands marketed to children contain “just as much sugar as a dessert—or more.” After reviewing 84 popular brands, the report’s authors alleged that three out of four cereals failed “to meet the federal government’s proposed voluntary guidelines for food nutritious enough to be marketed to children,” with 21 cereals exceeding the sugar limit “recommended by the industry’s own nutrition initiative.” In particular, EWG purportedly found that (i) 56 cereals contained “more than 24 to 26 percent sugar by weight”; (ii) 71 cereals exceeded 140 milligrams of sodium and 10 exceeded 210 milligrams; (iii) seven cereals exceeded 1 gram of saturated fat; and (iv) “at least 26 cereals are not predominantly whole-grain.” The group also criticized cereal companies for opposing the 2016 nutrition guidelines suggested by the federal Interagency Working Group (IWG) on Food Marketed…
Contending that the genetically modified (GM) corn in General Mills’ Kix Crispy Corn Puffs® and Honey Kix Crispy Corn Puffs® cereals renders their “All Natural Corn” representations false and misleading, a California resident has filed a putative class action against the company in state court. Lewis v. General Mills, Inc., No. BC472451 (Cal. Super. Ct., Los Angeles Cty., filed October 28, 2011). Citing the Cornucopia Institute’s “Cereal Crimes” report, and testing purportedly showing that Kix contains GM corn, the plaintiff seeks to certify a nationwide class of consumers who allegedly relied on the “All Natural” representations, as well as other company indicia of wholesomeness, to purchase products at a premium price and were denied the benefit of their bargain. According to the plaintiff, companies that produce GM crops note that that their genetic makeup has been “altered to exhibit traits that are not naturally theirs,” and the World Health Organization…
