Court denies Bimbo settlement in alleged mislabelling case
Judge Haywood S. Gilliam Jr cited concerns about a lack of notice to absent class members noting “the parties’ proposal is tantamount to no notice at all”.
Plaintiffs Alex Ang and Lynn Streit filed the complaint against Bimbo Bakeries USA – the American corporate arm of Mexican bakery giant Grupo Bimbo – in 2013. Court papers alleged the defendant capitalised on today’s consumers desire to eat a healthier diet by actively promoting the purported health benefits of its products on its product labels, in its advertising and on its websites.
They alleged some of the company’s branded goods were labelled to include the claims an ‘excellent source of fibre’, a ‘good source of whole grains’ and ‘may reduce the risk of heart disease’ despite not meeting the legal requirements for such claims.
Additionally, some of the products displayed the American Heart Association’s Heart-Check mark without acknowledging it was actually a paid-for endorsement; products were labelled as ‘bread’ despite containing artificial colouring; and labelled as ‘100% whole wheat’ even though they were made with non-whole wheat flour.
Finally, Ang and Streit contended labels suggested some goods were baked and delivered to stores daily, despite containing preservatives and having a long shelf life, which belie the ‘fresh’ claim.
The products at the centre of the lawsuit included Thomas’s Plain Bagel Thins, Sara Lee 100% Whole Wheat Bread, Sara Lee Soft & Smooth Whole Grain White Bread, Sara Lee Classic 100% Whole Wheat Bread, Boboli Whole Wheat Thin Pizza Crust and Entenmann’s bakery goods.
Talks of a settlement took place late last year, in which the plaintiffs were asking BBU to make the following labelling changes:
- Remove the colour in specific products under the Oroweat, Bimbo and Thomas’ brands;
- Remove the claim of a ‘good source of whole grain’ from specific Sara Lee bread items, although Bimbo divested the brand after the lawsuit was filed;
- Remove the American Heart Association Heart-Check mark from the Thomas’ brand; and
- Remove the soy flour from the ingredients lists in specific products under the Thomas’, Sahara and Sara Lee brands.
BBU denied any liability, wrongdoing or responsibility for the claims made by the plaintiffs and believed they were without merit.
The district court held a hearing in February, raising concerns about the lack of notice to absent class members in the proposed settlement, which both the plaintiffs and the defendants had said was not required as the settlement only provides for injunctive relief.
However, Judge Gilliam Jr. ruled against this, noting “notice in this case is not about allowing absent class members to opt out of the injunctive relief, but rather is about giving them the opportunity to understand how their rights will be affected by the proposed settlement; object to the settlement if they believe it is insufficient; and weigh in on the anticipated motions for attorneys’ fees and incentive awards for the named plaintiffs”.
He ruled that, in the absence of such notice, the parties’ proposal does not adequately account for the rights of absent class members.
Grupo Bimbo did not comment on the lawsuit.