SAN FRANCISCO (CN) - A federal judge tentatively approved a $5.25 million class action settlement that claims Ghirardelli's white chocolate chips do not contain any white chocolate.
Lead plaintiff Scott Miller bought a package of Ghirardelli white chocolate chips in June 2012, and discovered the next day that they did not taste like white chocolate.
"He reviewed the ingredients list on the packaging and noticed that the white chips contained no white chocolate, cocoa, or cocoa butter," according to U.S. Magistrate Judge Laurel Beeler's summary of the complaint.
The class accused Ghirardelli of misrepresenting the white chocolate content in its chocolate chips, wafers, white chocolate flavor, mocha mix and frappes. It alleged violations of U.S. Food and Drug Administration regulations, and state-law infractions including false advertising, unfair competition and fraud.
Miller, of Auburndale, Fla., sued in San Francisco, where Ghirardelli is based. The confectioner removed the case to Federal Court and sought dismissal, arguing that Miller lacks standing to sue over white chocolate products he did not buy.
In April 2013, Beeler tossed all the allegations that did not pertain to white chocolate chips.
The parties entered into mediation, and earlier this year told the court they had settled the case.
Ghirardelli agreed to pay $5.25 million into a common fund to be distributed among the class and the plaintiffs' attorneys.
Class members who make a claim will receive $1.50 for each purchase of the disputed white chocolate chips and 75 cents for each purchase of Ghirardelli products labeled "all natural."
Judge Beeler appointed the law firm Gutride Safier for settlement purposes, and granted preliminary approval of the settlement.
Evaluating the plaintiffs' case, Beeler noted that "there is a risk of continued, expensive litigation" and that the plaintiffs might find it difficult to obtain monetary relief from the confectioner because Ghirardelli claims that the disputed labels did not affect prices or sales volume.
A $5,000 incentive award for the lead plaintiffs is also "within a range of reasonableness" for their work on the case, Beeler wrote.
In total, the settlement proposed by the parties is "fair, adequate, and reasonable," and Beeler granted preliminary approval to it.
Notice of the settlement will be published in a half-page advertisement in People Magazine, as well as in the Oakland Tribune, on Facebook, and on cooking and baking websites.
A fairness hearing on the settlement is scheduled for Feb. 19, 2015 in Beeler's courtroom.
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