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|Court Rejects Kellogg's Frosted Mini-Wheats Class Action Settlement|
- Thursday, 19 July 2012 11:11
Court Rejects Kellogg's Frosted Mini-Wheats Class Action Settlement
By Mike Holter
Bad news for consumers waiting to cash in on the Kellogg's Frosted Mini-Wheats class action lawsuit settlement reached in 2010: a federal appeals court last week rejected the settlement because the pact gave $2 million to the lawyers who brought the case, and at most $15 for each consumer. The class action settlement was also rejected because it failed to identify which charities were to receive money and product donations.
The class action lawsuit charged Kellogg with falsely advertising that its Frosted Mini-Wheats cereal was scientifically proven to improve children’s cognitive functions. Under the class action settlement, Kellogg agreed to pay consumers $2.75 million in refunds. Those who submitted claims could receive $5 for each box of cereal they purchased for a maximum settlement refund of $15. Any remaining money would go to charities, in addition to $5.5 million worth of Kellogg food products to help the poor. However, the Mini-Wheats settlement did not say which charities would get the donations and failed to specify whether the value would by computed at cost, by wholesale or some other means.
Attorneys bringing the case valued the entire Frosted Mini-Wheats cereal settlement at $10.6 million, but the court said the terms were “too vague” to validate that number. The three-judge panel also said the hourly $2,100 fees paid to the attorneys that brought the class action lawsuit were excessive.
"Not even the most highly sought after attorneys charge such rates to their clients," Judge Stephen S. Trott wrote for the unanimous panel.
The lead counsel for the Mini-Wheats class action lawsuit said the hourly fees cited by the court were inaccurate and did not include two years of work by five law firms.
Updated July 19th, 2012
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Last Updated on Thursday, 27 December 2012 11:09