Muscle Milk’s manufacturer, CytoSport Inc., agreed to pay $5.3 million to settle a class action claiming the company overstated the nutritional value of the company’s drinks and snack bars.
The California federal lawsuit alleged that claims like “Healthy, Sustained Energy” and “healthy fats” ranged from misleading to bogus. They called Muscle Milk products the nutritional equivalent of “fat-laden junk food.” Plaintiff Claire Delacruz compared the beverages to Krispy Kreme doughnuts and alleged that the drinks had as much – if not more – total fat and saturated fat.
Under the terms of the settlement deal, which totals $5,275,000, consumers who purchased the drinks between 2007 and 2012 can receive up to $30 with proof of purchase or up to $10 without.
The company will make an $85,000 donation to the American Heart Association to “further the class’ interest in cardiovascular health,” and will not challenge an award of attorney’s fees up to 23.5 percent of the total settlement fund value.
CytoSport also agreed to change some of its labeling by removing the phrase “Healthy, Sustained Energy” from the principal display panel of the products for three years. The phrase “healthy fats” will also be removed from the labels for a three-year period unless the product contains less than 0.5 grams of saturated fat per serving or the company modifies the statement to include the phrase “See nutrition information for saturated fat content.”
To read the proposed settlement in Delacruz v. CytoSport, click here.
Why it matters: CytoSport has been busy defending its advertising in recent years from regulatory investigations by the Food and Drug Administration and the FTC as well as consumer class actions. Both agencies declined to take action against the company, but the FDA cautioned that some product labels were false and misleading because they included “healthy” claims but exceeded the maximum fat and saturated fat content as prescribed by regulation. Delacruz’s lawsuit was filed not long after the FDA sent CytoSport a warning letter, the effect of which would remind advertisers on the receiving end of an agency letter to brace themselves for consumer actions to follow.