Kellogg’s $20 Million Deal in Deceptive Label Suit Rejected

A proposed $20 million settlement in a class suit over Kellogg Sales Co. cereal marketing failed to win early approval as the Northern District of California said attorneys’ fee issues and other problems plagued the coupon- and cash-based deal.

Stephen Hadley and others allege Kellogg’s labeled some of its cereals and bars with health and wellness claims that were misleading in light of the products’ high added sugar content.

The deal includes a $12 million fund and $8.25 million worth of vouchers for future cereal purchases. Kellogg’s also agreed to marketing changes, including removing “Heart Health” claims on Smart Start ...