If a federal judge approves a $2.5 million nationwide class
action settlement next month over the allegedly deceptive
marketing of Nutella as a healthy breakfast food, consumers who
purchased the creamy spread will be eligible for a refund,
albeit a very modest one. They can get $4 for every jar of
Nutella purchased over the roughly four years of the class
period, with a $20 maximum.
But the deal is sweeter for the plaintiffs' lawyers. Much
Last week, class counsel in the case filed an application
for nearly $4 million in fees and expenses. The lawyers are
seeking 30 percent of the $2.5 million cash settlement -- or
roughly $750,000 -- plus expenses totaling $78,888. In addition,
the U.S. unit of Ferrero, the Italian maker of Nutella, has
agreed to pay class counsel $3 million in fees to cover
non-monetary relief that the plaintiffs' lawyers obtained for
the class, which included changes to the marketing campaign of
Nutella. The fees must be approved by U.S. District Judge Freda
Wolfson of Trenton, New Jersey, who has scheduled a hearing on
July 9 to address the fairness of the settlement.
Lawyers from two firms that served as lead counsel --
Carella, Byrne, Cecchi, Olstein, Brody & Agnello and Scott and
Scott -- did not return calls seeking comment.
Typically, class action lawyers seek roughly a third of any
settlement, so the 30 percent of the $2.5 settlement million
that the Nutella lawyers want is not unusual. But what is a bit
surprising is the additional $3 million, which won't come out of
the settlement fund. Instead, according to the fee application,
the money will come from either Ferrero or its insurance
The class attorneys argue that the fee is justified because
of the effect their work had on the marketing campaign of
Nutella. The crux of the case alleged that Nutella was
deceptively marketed to consumers as a "wholesome" food that
could be served as part of a "balanced" and "healthy" breakfast.
In the settlement, Ferrero agreed to revise some of its
marketing material. For example, it said it would change the
back panel of the Nutella label by removing the phrase "An
example of a tasty yet balanced breakfast" and replace it with
"Turn a balanced breakfast into a tasty one." Class counsel
trumpeted the change in their fee application.
"As a result, going forward, the consumer no longer will be
exposed to false messaging about the nutritional value of the
product," they wrote.
Perhaps not surprisingly, others are a bit more dubious of
the litigation's value. Russell Jackson, a partner at Skadden,
Arps, Slate, Meagher & Flom, didn't mince words in a post for
his Consumer Class Actions & Mass Torts blog in January, when
the settlement was first submitted in court.
"The idea that a parent could say with a straight face --
let alone under oath -- that she did not know the product
contained lots of sugar and oils and Nutella's manufacturer
somehow hid that fact from her is patently ridiculous," he
wrote. "Read the Nutrition Facts on the label!"
(Reporting by Andrew Longstreth)
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