Wesson Oil Consumers Lose Bid to Revive $8 Million False-Ad Deal

Wesson Oil consumers lost their attempt to reinstate an $8 million false ad settlement with Conagra Brands Inc., as a federal court in California said their attorneys’ fee reduction offer failed to address other concerns about collusion that led it to scrap the deal late last year.

Robert Briseño and others sued in 2011, alleging Wesson Oil was deceptively labeled “100% natural” because it contained genetically modified ingredients. Some 11 statewide classes were certified.

Conagra agreed in 2018 to an uncapped settlement that provided claimants 15 cents for each product purchased. Class claims totaled less than $1 million.

The company, which had stopped using the “natural” label in 2017 and later sold the product line, also agreed not to resume using “100% natural” should it reacquire the brand.

Conagra agreed not to challenge class counsel’s request for nearly $7 million in fees and costs, and a “kicker” clause gave remaining funds back to the company if the fees were cut.

The parties reached the settlement by accepting a proposal from mediator Magistrate Judge Douglas F. McCormick.

University of Chicago law professor M. Todd Henderson objected to the settlement and later appealed.

Last June, the U.S. Court of Appeals for the Ninth Circuit said the deal “reeks of collusion” and directed the district court to reevaluate.

The U.S. District Court for the Central District of California threw out the settlement last December.

The plaintiffs’ attorneys then asked Judge Cormac J. Carney to preserve the deal by cutting their fee.

But the lopsided fee alone didn’t doom the deal, he said Tuesday.

Rather, the disproportion, together with other factors, “indicated that self-interest infected the negotiations,” the court said.

Those other indicia of attorney self-interest include the clear sailing provision, the reverter, and McCormick’s explanation that he considered only what the parties would be likely to accept and not what was fair or just in making a settlement proposal, the court said.

Carney also cited the “worthless injunction,” evidence that the parties knew the claims rate would be extremely low, and class counsel’s rejection of a deal that would have given $4 million to the attorneys and $4 million to the class.

“Even with a reduction in class counsel’s attorney fees, the other troubling aspects of the settlement remain,” the court said.

Milberg Coleman Bryson Phillips Grossman PLLC, Tadler Law LLP, and DiCello Levitt Gutzler LLC are class counsel. Alston & Bird LLP represented Conagra Brands, formerly known as ConAgra Foods. Hamilton Lincoln Law Institute’s Center for Class Action Fairness represented Henderson.

The case is Briseno v. Conagra Foods, Inc., C.D. Cal., No. 2:11-cv-05379, 2/22/22.