Frosted Mini-Wheats’ Class Action Settlement Reversed And Vacated.

A false advertising class action was filed against Kellogg Company after the company marketed Frosted Mini-Wheats cereal claiming it was scientifically proven to improve children’s cognitive functions for several hours after breakfast. When the action was settled with the trial court’s approval, there was a provision that any funds remaining would be donated to charities chosen by the parties and approved by the court under the cy pres doctrine. Kellogg also agreed to donate $5.5 million worth of its food items to charities that feed the indigent, also under the cy pres doctrine. Two class members objected to the settlement, arguing its use of the cy pres doctrine was improper because “the only relationship between this lawsuit and feeding the indigent is that they both involve food in some way.” The Ninth Circuit set the settlement aside, giving two reasons: the district court abused its discretion because the settlement does not identify the ultimate recipients of the cy pres awards not does it set forth any limiting restriction on those recipients. The appeals court further found the negotiated attorney fees excessive. Dennis v. Kellogg Co. (Ninth Circuit; July 13, 2012.) (Case No.’s 11-55674, 11-55706).