Kroger Bread Crumb False Ad Deal Gets Conditional Early Nod

Kroger Co. and California consumers secured a federal court’s conditional early approval of an $801,000 settlement resolving allegations the grocery chain deceptively marketed bread crumbs as having “0g Trans Fat Per Serving” when they were made with partially hydrogenated oil, a type of trans fat.

The terms appear fair, but the parties must submit a revised plan for notifying class members about the settlement, Judge Jeffrey T. Miller of the U.S. District Court for the Southern District of California said July 2.

The judge said he wasn’t convinced that the proposed notice, mainly through Facebook ads and publication in one newspaper, would reach class members.

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.

Separately, the plaintiffs’ attorneys may seek up to $400,000 in fees and costs and
an incentive award of up to $7,000 for lead plaintiff Shavonda Hawkins.

The court preliminarily approved the proposed fee request as “a reasonable upper limit.”

But it cautioned that the settlement structure could have allowed Kroger to negotiate high fees with the plaintiffs’ lawyers in exchange for counsel accepting an unfair settlement on behalf of the class.

Here, the maximum attorneys’ fee award as a percent of the fund far exceeds the typical 25% benchmark, Kroger has agreed not to object, and Kroger will retain the difference if the court ultimately awards less than the requested amount, Miller said.

Class counsel must submit detailed information to support their motion for attorneys’ fees, including comprehensive billing records and an explanation of their hourly rates, the court said.

Concerns about collusion between attorneys for companies and plaintiffs derailed recent settlements in suits about General Mills fruit snacks and Wesson oil.

In 2020, the court 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.

In January, the district court allowed most of Hawkins’ claims to advance.

Trans fats have been associated with a variety of health problems. The Food and Drug Administration said in June 2015 that partially hydrogenated oils are no longer “generally recognized as safe” and gave the industry three years to phase out trans fats from foods. A June 18, 2018, deadline was later extended by two years.

Weston Firm PC represented Hawkins. Davis Wright Tremaine LLP and TroyGould PC represented Kroger.

The case is Hawkins v. Kroger Co., S.D. Cal., No. 3:15-cv-02320, 7/2/21.