Kroger $1.2 Million Bread Crumb False-Ad Deal Gets Final Nod

Kroger Co. and consumers secured a California federal court’s approval for a $1.2 million deal resolving allegations that the grocery chain deceptively portrayed bread crumbs as free of trans fats.

Shavonda Hawkins alleged that Kroger Bread Crumbs were marketed as having “0g Trans Fat Per Serving” when they were made with partially hydrogenated oil, a type of trans fat.

The U.S. District Court for the Southern District of California in 2020 certified a class of California citizens who bought affected bread crumbs between Jan. 1, 2010, and Dec. 31, 2015. The U.S. Court of Appeals for the Ninth Circuit denied Kroger’s bid for a quick appeal.

Kroger agreed to create a $780,000 fund to notify and pay class members and to make a separate, one-time $21,000 payment to the American Heart Association.

The company also agreed not to oppose an attorneys’ fee award of up to $400,000 and a $7,000 incentive award to Hawkins. These payments were to be made separately from the settlement fund.

The Kroger settlement fund and the fee proposal got conditional early approval last summer but the court expressed concerns, including about potential collusion.

The settlement contains a clear sailing provision by which Kroger agreed not to object to the stated fee request. And although there is no explicit reversionary provision, the agreement is structured so that attorneys’ fees are paid separately from the common fund. This suggests that Kroger would retain the difference between the negotiated fee cap and any award below that amount, the court said.

Nonetheless, Judge Jeffrey T. Miller said Feb. 4 that the deal’s value to class members warrants upholding it despite the indications of possible collusion.

Each class member is expected to receive about $42, an amount the court said is “fair, reasonable and adequate, especially in light of the $2-$3 purchase price” of the bread crumbs.

The court also said the parties resolved this case after multiple settlement conferences, and accepted a mediator’s settlement proposal.

The attorneys’ request for $400,000 is reasonable, the court said. Their lodestar—the time spent on the case multiplied by their hourly rates—was about $1 million.

Hawkins’ $7,000 service payment also got the final green light.

Weston Firm represents the class. Davis Wright Tremaine LLP and TroyGould PC represented Kroger.

The case is Hawkins v. Kroger Co., S.D. Cal., No. 3:15-cv-02320, 2/4/22.