The Dannon Co. is quietly working on a settlement of complaints filed by consumers questioning the health-benefit claims made on behalf of its Activia and DanActive yogurts.
In a March 31 filing with the U.S. District Court in New Jersey, Dannon attorney David Ackerman of law firm Bingham McCutchen, asked the court to stay a pending complaint against Dannon filed there. He stated: "The parties to this and other similar cases have reached a tentative nationwide class-action settlement contingent upon the occurrence of several events." A Bingham McCutchen rep declined to comment on the settlement talks.
Tim Blood, a partner with Coughlin Stoia Geller Rudman & Robbins, San Diego, who filed the initial plaintiff's suit in Los Angeles U.S. District Court in January 2008, declined comment. That suit seeks class-action status and demands Dannon issue consumer refunds. Blood -- whose law firm previously won more than $7 billion for Enron shareholders -- has said the amount Dannon owes consumers could be as much as $300 million.
It's not known if refunds will be a part of the settlement or what effect the settlement terms will have on product claims in advertising, handled by Young & Rubicam, New York.
Michael Neuwirth, a Dannon rep, said the company has no statement beyond what it publicly said after Los Angeles resident Patricia Wiener filed the initial claim. At that time, the company said it stood by its product claims.
Wiener claimed financial injury due to deceptive advertising -- based on a lack of clinical proof to support marketing assertions -- that she said convinced her to buy the product. Dannon was able to charge a 30 percent premium because of those perceived benefits, according to her lawyers at CSGR&R.
Others since sued: In the court filing last week, Dannon's attorney referenced the action brought by Joan Wegrzyniak on Dec. 8 in New Jersey as well as "three other similar cases" filed last year in Ohio, Florida and, the most recent, in Arkansas on Jan. 9.
Sources said the government has also been looking into Dannon's claims.
When Wiener filed her suit, CSGR&R said that Dannon had already spent more than $100 million to advertise Activia and DanActive. Its Activia campaign, starring Jamie Lee Curtis, underscores that Activia is the only yogurt containing "Bifidus Regularis," which, it claims, is "clinically proven" to regulate the digestive system. Similarly, Dannon uses a faux-Latinate twist in trademarking the cultures in DanActive, naming them L. casei Immunitas bacteria. DanActive is also packaged in a 100-millileter daily dose, with suggested usage in the morning. CSGR&R's Blood has said that Dannon's contention that those claims are clinically proven is "simply false."
Steve Gardner, litigation director at the Center for Science in the Public Interest, said private litigation about food or nutrition has increased over the last five years. "It's a good thing," he said. "There's a lot of predatory marketing by food companies."