Under a settlement agreement approved by a New Jersey federal court, Dakota Growers Pasta Co. will pay $7.9 million to resolve claims that it deceptively markets, advertises and sells Dreamfields Pasta as having a low glycemic index and only five grams of digestible carbohydrates per serving, making it a “healthy alternative to traditional pasta.” Mirakay v. Dakota Growers Pasta Co., Inc., No. 13-4429 (U.S. Dist. Ct., D.N.J., order entered October 20, 2014). The agreement stipulates that for one year, Dakota will remove from its packaging (i) the claims of a low glycemic index and low carbohydrates and (ii) the claim that the product can reduce spikes in blood glucose levels. Dakota will also pay $2.9 million in attorney’s fees and $5 million into a settlement fund for distribution to class members, who will receive $1.99 for every box of pasta ordered online without limit as well as for each box purchased in a store, up to 15 boxes. Unclaimed funds will first be used to increase members’ awards up to 50 percent, and the remainder will be donated to the American Diabetes Association. More than 333,000 members received notification of the settlement via email.
Several objections to the settlement were filed before the September 2014 fairness hearing; objectors argued that the agreement did not provide best notice to potential class members because, they said, the settlement notification should have been posted on Dakota’s Website and product packaging, posted at retailers and communicated to heart and diabetic associations. They also objected to the “unreasonable” attorney’s fees, the potential amount of the cy pres donation and the period of time that Dakota will adjust its advertising. The court dismissed the objections, certified the class and approved the settlement agreement.