Bimbo Bakeries Label Deal Gets Final Nod but Attorneys’ Fees Cut

Bimbo Bakeries USA Inc. and consumers alleging it deceptively marketed Sara Lee, Entenmann’s, Thomas’, and other baked good brands got final approval of an injunctive relief class settlement, but a California federal court cut the attorneys’ fees and allowed no incentive awards for the named plaintiffs.

The deal, which provides no money to the California class but calls for label and ingredient changes to some products, was tentatively approved by the U.S. District Court for the Northern District of California in April on its second go-round. Inadequate notice to class members led the court to reject the initial settlement proposal.

Judge Haywood S. Gilliam Jr. said controlling precedent requires final approval. But he questioned the deal’s value to the class and reduced a $325,000 fee request to $225,000. By far, he said, “the main beneficiaries of this long-running yet underwhelming case were the attorneys.”

Alex Ang and Lynne Streit sued in 2013. They raised four separate labeling challenges, including an allegation that Bimbo applied the American Heart Association’s “Heart-Check Mark” to certain products without acknowledging that the mark is a paid endorsement, and labeled products as “100% Whole Wheat” even though they were made with non-whole wheat flour.

It’s unclear how much of the results achieved were actually motivated by this litigation, the court said. Of the 16 different products whose labels purportedly changed as part of the settlement, the defendant either discontinued or divested seven, it said.

During the final fairness hearing, defense counsel confirmed that some of the decisions to alter ingredients and labels were based in part on independent business decisions, the court said.

Even assuming the changes were all made based on the lawsuit, the nine products represent less than one-third of those identified in the plaintiffs’ operative complaint, it said.

The court also expressed concerns about the requested $5,000 incentive awards saying absent class members are receiving no monetary awards and where the actual value of the injunctive relief is questionable.

Ang and Streit would be receiving drastically preferential treatment as compared to the other class members if the awards were granted, it said.

The court certified California classes in 2018, for injunctive relief only.

Fleischman Law Firm, Pratt & Associates APC, and Barrett Law Group PA are class counsel. Baker & McKenzie LLP represented Bimbo Bakeries.

The case is Ang v. Bimbo Bakeries USA, Inc., 2020 BL 373311, N.D. Cal., No. 13-CV-01196, 9/29/20.