Agreement finally settles to the bottom of the docket

Cocktail party banter

Have you ever wanted to bust out exhaustive, detailed accounts of how cottonseed, corn, soybean and canola oil are processed? How about the industrial derivations of vinegar, citric acid and various sorts of food additives?

Yes? Really? Well, have we got the lawsuit for you.

The case in question is a class action originally filed in 2014 by Matt Difrancesco, Angela Mizzoni and Lynn Marrapodi, consumers from Massachusetts and New York. The suit, filed in the District of Massachusetts, accused iconic snack producer Utz Quality Foods Inc. of falsely labeling scores of its products as "all natural."

Hence the lessons in canola oil pressing techniques.

Thoroughly thorough

The suit goes deep on the manufacturing process of a number of ingredients in Utz's Bachman- and Utz-branded products.

"The manufacturer first physically presses the cottonseed, rapeseed, corn, or soybeans, which typically extracts a small portion of the extractable oil," the complaint states in one of its more lyrical passages. "Next, the vegetables are treated with hexane ..."

All of this detail is marshalled in favor of a three-prong attack on Utz's "All Natural" labeling: First, that the products are not natural because they are ultimately derived from genetically engineered ingredients; second, that these products are so overprocessed that, regardless of GMO status, they are effectively man-made; and third, certain other ingredients are just plain old synthetic substances (such as malic acid, an ingredient which we've covered before).

The plaintiffs sought relief for breach of warranty and unjust enrichment under New York and Massachusetts laws.

Settlement agreements began surfacing in February 2017, but were kicked back more than once by an unsatisfied district court. Some ambiguities in the plaintiffs' settlement documents led to moments of wry comedy from the bench: "So, what we have is monies created, a pot of money created to make a case go away, to get closure on marketing documents, in a way that does not seem to be leading to much in the way of likely financial return to class members, and, frankly, the class members are, because of the difficulty in identifying them, anybody who is prepared to say that they bought some potato chips."

That was a passage from a hearing in November 2018, a year after an amended settlement agreement was submitted.

The plaintiffs cleaned up their act, apparently, because in March the court gave the settlement agreement the go-ahead. Utz admits to no wrongdoing. The plaintiffs get a $1.25 million settlement fund to pay up to $20 per household "depending on [the] amount of products purchased" and up to $5,000 for each named plaintiff.

The takeaway

Businesses should keep in mind the requirements for labeling their products as all natural before making such representations to consumers. Otherwise, they stand to face class action lawsuits for claims of false and misleading representations that may result in the business having to correct its advertising campaign and pay damages and restitution to affected consumers.

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