Court rejects settlement in Bimbo labeling case
On March 31, a district judge in California rejected the approval of a class-action settlement pertaining to a labeling dispute that involved plaintiffs Alex Ang and Lynn Streit and defendant Bimbo Bakeries USA, Horsham, Pa., a company of Grupo Bimbo SAB de CV. Due to absences from class, the US District Court for the Northern District of California raised concerns. A phone conference was scheduled by the court for April 14.
The action was first filed on March 18, 2013, and it concerns the purported misbranding of baked goods sold under names like Thomas’, Bimbo, and Oroweat. Products labeled as a “good source of whole grain” or a “excellent source of whole grain,” products labeled as “bread” even though they contained added coloring, and products labeled as “100% whole wheat” even though they were made with non-whole wheat flour are a few examples of allegedly improperly labeled products. Another example would be products bearing the American Heart Association’s Heart-Check mark without disclosing that the mark is a paid endorsement.
In December 2019, settlement negotiations were held. On February 13, the district court heard a hearing regarding it. Concerns regarding the proposed settlement’s omission of notice to absent class members have been brought up by the court. Class notification was deemed unnecessary, according to both the plaintiffs and the defendants, given the settlement solely offers injunctive relief. The court’s decision from March 31 was inconclusive.
“Yet, as the court has explained, notice in this case is about providing them with the opportunity to comprehend how their rights will be affected by the proposed settlement; to object to the settlement if they think it is inadequate; and to weigh in on the anticipated motions for attorneys’ fees and incentive awards for the named plaintiffs,” US District Judge Haywood S. Gilliam Jr. “The court gave the parties ample opportunity to address the identified deficiencies, cognizant of their efforts to reach a settlement in this action.” However, the parties have often shown a reluctance to give meaningful notice of the terms of the settlement to absent class members.
The proposed settlement allows absent class members to access information about the settlement on the class counsel’s website, but the court expressed confusion as to why the notice could not be posted in a similar manner on the websites of the defendants or in a place that absent class members are likely to visit.
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“The court determines that the parties’ proposal is equivalent to no notice at all and does not adequately account for the rights of absent class members in the absence of such notice,” Mr. Gilliam stated.
Bimbo Bakeries USA maintains that the plaintiffs’ claims are baseless and disavows any wrongdoing or accountability under the terms of the proposed settlement. In a court filing dated February 20, BBU provided specific labeling changes:
color removed from some products sold under the Oroweat, Bimbo, and Thomas brands; the American Heart Association Heart-Check mark removed from some products sold under the Thomas brand; the claim of being a “good source of whole grain” removed from some Sara Lee bread items, despite Bimbo selling the Sara Lee products after the lawsuit was filed; and
Soy flour was taken out of the ingredient lists of certain items sold under the Sara Lee, Sahara, and Thomas brands.