OAKLAND, Calif. (CN) – Under a settlement approved by a federal judge Friday, Chipotle will pay consumers $6.5 million to settle claims that it ran a misleading ad campaign pledging to serve only non-GMO food.
Through ads using phrases such as “G-M-Over It,” the fast food chain touted itself as the first in the United States to use only ingredients derived from non-genetically modified sources.
Indignant Chipotle customers sued the fast food chain in 2015, claiming that they would never have eaten there had they known its tacos, burritos, sour cream and cheese all come from cows fed with genetically modified feed. Chipotle eventually dropped its “Food With Integrity” campaign.
U.S. District Judge Haywood Gilliam dismissed the case in 2016 after lead plaintiff Colleen Gallagher dropped out for unknown reasons.
But he changed his mind in 2018 after the Ninth Circuit ruled in Davidson v. Kimberly-Clark Corp. that under some circumstances it may be possible for a consumer to seek injunctive relief after already buying a product and knowing or suspecting the label or advertising to be false.
He certified three classes of Chipotle customers in California, Maryland, and New York who bought food items containing meat and dairy products from animals fed with genetically modified feed.
The parties agreed to enter settlement talks just days before a trial scheduled for Sept. 16, 2019. They reached an agreement that combined the three classes to one, defined as all U.S. residents who purchased Chipotle food from April 27, 2015 to June 30, 2016.
Though the $6.5 million figure seems large, class members will end up getting refunds of $2 for each documented meal, up to 15 meals per household. They can also receive $2 refunds of up to five meals without supporting documentation.
Chipotle also agreed to donate $475,000 to several charities, including CityMeals on Wheels in New York, Share Our Strength in Washington, D.C. and Children’s Hospital of Philadelphia.
Attorneys at Kaplan Fox and Kilsheimer LLP and Kobre & Kim LLP will receive one-third of the settlement amount, roughly $1.9 million. Lead plaintiffs Martin Schneider, Sarah Deigert, Theresa Gamage, and Nadia Parikka will receive incentive awards of $5,000.
Lead attorney Laurence King did not immediately respond to an email seeking comment late Friday. Chipotle also did not reply to a request for comment.