Gray•Duffy, LLP settles nationwide class action against major food manufacturer/distributor for approximately 1% of the total amount claimed. (Musgrave)

June 2016

Musgrave v. Marie Callender Pie Shops, Inc., et al. Gray·Duffy, LLP settles nationwide class action against major food manufacturer/distributor for approximately 1% of the total amount claimed.

Overview

Richard M. Williams of Gray·Duffy’s Redwood City office and Nathan B. Lee of Gray·Duffy’s Encino office lead a team which successfully settled a food labeling class action lawsuit alleging mislabeling and fraudulent distribution of six (6) packaged baking products, all of which were labeled “all natural” and which allegedly contained sodium acid pyrophosphate (or “SAPP”), a component of baking powder. Under Federal regulations, SAPP is permitted in organic products when used for the purpose intended by Gray·Duffy’s client, ICC/Marie Callender’s Gourmet Products Division, as a “baking powder” or leavening agent. Such use is allowed under 7 C.F.R. §205.605(b).

Discussion

The class plaintiffs’ allegations were essentially that Defendant ICC/Marie Callender’s Gourmet Products Division, like many of its competitors, jumped on the “all natural” bandwagon and began wrongfully labeling its baking products as “all natural” when, in fact, the products contain SAPP, which the plaintiffs contended did not meet the “all natural” standard. As such, the plaintiffs alleged both California and nationwide classes of individuals who on or after May 1, 2010, purchased Marie Callender’s food products that were labeled “all natural” yet contained SAPP ICC/Marie Callender’s Gourmet Products were heavily distributed nationwide and the class membership was estimated to be in the hundreds of thousands in California and in the millions nationwide. After several years of extensive written and expert investigation and discovery, and two lengthy mediations with retired Judge John Komar of JAMS in San Jose, California, and prior to the certification of the case as either a California or a nationwide class action, the case was settled in its entirety. The initial settlement demand by the Plaintiff class was $9,500,000. This demand was met with a $25,000 offer by the defendant after a day long mediation with Judge Komar. Following many months of further discovery and negotiation, a second mediation with Judge Komar was held. The second mediation included substantial briefing by both sides of the case regarding the issue of what constitutes an “all natural” substance and the interpretation of Federal Food & Drug regulations and Congressional Enactments dealing with food product labeling issues. After substantial debate, discussion and argument concerning the statistical issues and other past and pending labeling class actions against various members of the food industry, the case settled following the second day of mediation for $100,000. United States District Judge Hanwood S. Gilliam, Jr., approved the settlement and signed an Order dismissing the case.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.