A federal court in California has approved a motion for preliminary approval of a class action settlement in litigation involving allegedly fraudulent claims that Kellogg Co.’s Frosted Mini-Wheats® cereal “was clinically shown to improve children’s attentiveness by nearly 20%.” Dennis v. Kellogg Co., No. 09-1786 (U.S. Dist. Ct., S.D. Cal., decided October 14, 2010). The settlement class consists of everyone in the United States who bought the product between January 2008 and October 2009. The company has agreed to create a $2.75 million fund “to provide cash payments to class members who submit valid Claim Forms. Class members may recover the full purchase price of the cereal they purchased ($5 per box), up to three boxes.” Any funds remaining will be “distributed to appropriate charities pursuant to the cy pres doctrine.”
The company will also distribute specified food items valued at $5.5 million to charities feeding the indigent and will pay the costs of class notice, claims administration and attorney’s fees and expenses up to $2 million. According to the court, the proposed settlement appears to be fair and, “because identification of class members in this case is difficult or impossible, the requirement that Defendant make a substantial charitable donation is appropriate.” The reasonableness of class counsel’s fees will be determined at the final settlement hearing, scheduled for February 14, 2011. The court’s order includes approval of the method of class notice and a mechanism for class members and others to object to the proposed settlement.