A federal judge approved a $10.5 million settlement in a class action claiming that Kellogg falsely advertised its Frosted Mini-Wheats cereals as “clinically shown to improve children’s attentiveness by nearly 20%.” Class members will receive $2.75 million and $5.5 million will be given to charities to feed underserved communities.

The plaintiffs filed suit in May 2009 alleging that Kellogg’s advertising, marketing, and promotional campaigns for the nine varieties of Frosted Mini-Wheats made claims that consumption of the cereal improved kids’ attentiveness, memory, and other cognitive functions to a degree not supported by clinical evidence. After mediation earlier this year, the parties reached a settlement. Under the terms of the settlement, class members may seek reimbursement of $5 per box of purchased product, up to $15 per consumer.

In addition, Kellogg agreed to refrain from using any assertion to the effect that “eating a bowl of Kellogg’s Frosted Mini-Wheats cereal for breakfast is clinically shown to improve attentiveness by nearly 20%” for a period of three years. However, Kellogg may make claims about the impact on attentiveness from eating the product, as long as it limits and qualifies its claims. For example, “Clinical studies have shown that kids who eat a filling breakfast like Frosted Mini-Wheats have an 11% better attentiveness in school than kids who skip breakfast,” would be acceptable under the settlement as long as it is substantiated.

Finally, “because identification of class members in this case is difficult or impossible,” Kellogg said it would distribute $5.5 million worth of various Kellogg-branded food items to charities that provide food to the indigent.

To read the complaint in Dennis v. Kellogg Co., click here.

To read the settlement agreement in Dennis v. Kellogg Co., click here.

Why it matters: The settlement solves another of Kellogg legal woes: in July 2009, the FTC barred Kellogg from making the claims at issue in the class action lawsuit. And earlier this year, the agency settled with Kellogg in an expanded consent order over claims the company made about its Rice Krispies cereal. Product packaging claimed the cereal “now helps to support your child’s immunity,” and that “Kellogg Rice Krispies has been improved to include antioxidants and nutrients that your family needs to help them stay healthy.” Under the terms of the consent order with the FTC, Kellogg is now prohibited from making claims about any health benefit of any of its food products unless the claims are backed by scientific evidence and are not misleading.