Last week, Coca-Cola reached a settlement in a consumer class action alleging that it falsely advertised its Minute Maid Enhanced Pomegranate Blueberry Flavored Blend of 5 Juices by creating the impression it was made primarily of pomegranate and blueberry juices, when it was actually composed mostly of cheaper apple and grape juices. These allegations by consumers are, essentially, a repeat of the claims brought against the soft drink company by its competitor Pom Wonderful, which resulted in an important Supreme Court decision.
On February 26, Plaintiff Niloofar Saeidian filed a request for Judge Otero of the Central District of California to preliminarily approve the settlement, which proposes the following terms:
- A notice plan combining online advertisements and an advertisement in People magazine (estimated to reach approximately 70.2% of class members);
- Establishment of a settlement website, www.flavoredjuicesettlement.com, containing information about the claims process;
- Full cash refunds with no monetary cap for juice purchases, so long as class members can supply some proof of purchase;
- For consumers with no proof of purchase, Coca-Cola will offer “Product Replacement Vouchers”, with a value of up to $4.99 (capped at 200,000 vouchers);
- Coca-Cola’s commitment to no longer sell the product;
- $300,000 charitable donation to the organization Feeding America; and
- Payment of up to $700,000 in attorneys’ fees and costs.
Although plaintiff’s counsel sells the proposed settlement as imminently fair and full-proof, there are some problems that may have the court sending the parties back to re-negotiate.
First, and most glaring, the “no cap” monetary settlement for all consumers with proof of purchase of the products seems illusory at best. The practical reality is that few, if any, consumers will retain proof that they purchased the juice. Such difficulties are well-documented in recent ascertainability decisions, where courts acknowledge consumers are unlikely to keep receipts or other proof of purchase for small ticket items. The “no cap” aspect of this settlement, while it sounds impressive, isn’t really much of a win when very few consumers will be able to satisfy the criteria to obtain a refund.
The vouchers for free product are also problematic. While there is a cap on the amount of vouchers that Coca-Cola will supply, there does not seem to be a cap on the amount of vouchers that an individual consumer can request. This, ostensibly, means that a claimant (without any proof of an actual purchase), could request multiple vouchers. Less-than-honest individuals who never purchased the juice could receive several vouchers. Such fraudulent practices are likely to dilute of the class award, just like the Red Bull settlement, and the reality is that many consumers with bona fide claims will go away empty-handed.
The parties have called for a settlement approval hearing, and it remains to be seen whether or not the court will actually approve this settlement.