A federal court in California, presiding over two putative class actions alleging that I Can’t Believe It’s Not Butter!®, Country Crock® and other cholesterol-free margarines were falsely advertised as nutritious, has denied a joint motion for preliminary approval of a class settlement. Red v. Unilever PLC, No. 10-00387 (U.S. Dist. Ct., N.D. Cal., San Jose Div., order filed November 16, 2010). The court was concerned about “the waiver of certain damages claims and need for opt-out in a Federal Rule of Civil Procedure 23(b)(2) injunctive class where the proposed class received no monetary relief.”

Scheduling a settlement hearing for the parties with a special master on or before December 13, 2010, the court allowed the parties to continue negotiating and expanded the special master’s authority “to negotiate a revised settlement to address the Court’s concerns.”

The cases, filed in 2009, involve claims that butter-substitute makers have violated consumer protection laws by promoting their products as “healthy” and “nutritious” when they contain purportedly dangerous levels of trans fats. Further details about one of the cases appear in Issue 307 of this Update. According to a news source, the proposed settlement would require the company to reduce or eliminate the use of partially hydrogenated vegetable oils in its margarine sticks by the end of 2011. The defendant was apparently prepared to spend $10 million to remove trans fat from its spread and commit $500,000 to research aimed at finding an alternative ingredient that would allow margarine sticks to remain firm. The proposed settlement would also apparently have required the court to certify a nationwide class of those who purchased the products since January 2000. See Product Liability Law 360, November 17, 2010.