retail news in context, analysis with attitude

The Los Angeles Times reports that the US 9th Circuit Court of Appeals has ruled that the proposed settlement of a class action suit against Kellogg Co. - accusing the cereal company of making false health claims for its products - cannot be implemented because too much of the money was slated to go to plaintiffs' attorneys and not nearly enough to the actual plaintiffs.

According to the story, the settlement would have resulted in five law firms sharing $2 million in fees, while the most any of the plaintiffs would have gotten is $15.

The Times writes that "the settlement required Kellogg to drop a claim that eating Mini-Wheats would improve attentiveness by 20% but permitted the company to advertise that children who ate the cereal did better in school than those who skipped breakfast." The appeals court judges also said that the settlement - which among other things, called for Kellogg Co. to "establish a $2.75-million fund for consumers who filed claims for reimbursement of the cost of as many as three boxes," as well as to "distribute $5.5 million worth of Kellogg food products to unspecified charities that help the poor," was "defective" because it was "exceptionally vague."
KC's View:
One can only guess that the settlement language must have been atrocious for three lawyers wearing black robes to smack down a bunch of other lawyers for charging too much money for their services.

Kind of makes you feel warm inside, though, doesn't it?