‘All Natural’ Trader Joe’s Labels End in $3.3M Deal

(CN) - Trader Joe's can pay $3.3 million to settle class-action claims that it sticks "All Natural" labels on products that contain synthetic ingredients, a federal judge ruled.

U.S. Judge District William Orrick in San Francisco also approved an award of $950,000 in attorneys' fees to the plaintiffs' counsel. The amount, roughly 28 percent of the settlement fund, is "consistent with the lodestar and the success achieved, and in the acceptable range in the Ninth Circuit," Orrick said.

In addition to providing equitable relief, Trader Joe's has agreed to stop using the disputed labels, according to the order.

Tamar Davis Larsen and Aran Eisenstat are the lead plaintiffs in the case, which accuses the popular grocer of committing fraud in violation of state and federal law by willfully mislabeling several products as "All Natural" and "100% Natural," despite their allegedly use of one or more synthetic ingredients.

In all, the plaintiffs filed three complaints, defeated a motion to dismiss and motion for judgment on the pleadings, and began merits and class discovery.

The parties attended three separate mediation sessions under the supervision of the retired Judge Peter Lichtman, but failed to agree on settlement terms. Lichtman then prepared his own proposed settlement, including settlement terms and attorneys' fees, which the parties accepted. The parties filed the stipulation of class settlement this past February.

Each class member with proof of purchase is entitled under the settlement to a full reimbursement for each product bought during the class period. Each class member without a proof of purchase may receive reimbursement for the value of up to 10 products. Any amounts left in the fund will not revert to Trader Joe's, but will rather be distributed in the form of products to class members at Trader Joe's retail locations throughout the United States.

As of June 29, 2014, there were a total of 59,830 claims made by class members representing a total claim value of about $1.9 million.

Orrick is also presiding over an unrelated class action that accuses Trader Joe's of misbranding or mislabeling products to suggest they do not contain sugar.

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