Dannon Settles False Ad Suit for $35 Mil.

Coughlin, Stoia, Geller, Rudman & Robbins, the law firm that today secured a $35 million settlement from Dannon over claims of allegedly misleading ads is pursuing a similar case against a new target: General Mills and its Yoplait Yo-Plus yogurt.

Earlier today, Dannon said it would create a $35 million fund to reimburse consumers as part of an agreement to settle a class-action lawsuit concerning allegedly misleading ads for its Activia and DanActive yogurt products. Dannon also said it would make changes in the way it markets and labels these products, which are handled by New York’s Young & Rubicam, a unit of WPP Group. Actress Jamie Lee Curtis has frequently appeared in ads for Activia.

The agreement, subject to approval by the U.S. District Court for the Northern District of Ohio, is thought to be the largest settlement ever over charges of false advertising for food products.

A rep for the company said Dannon “decided to settle the lawsuit to avoid the uncertainty and expense of further litigation and denies any wrongdoing.”

On March 17, CSGR&R filed a class action suit in a Southern Florida District Court citing Yo-Plus’ claims that its trademarked “exclusive” Optibalance bacteria cultures regulate digestive health in a way other yogurts do not.

Similar to language in the suit against Dannon, the complaint against YoP-Plus alleges, “General Mills has no support for these claims, even though it states that it does, going so far as to claim it has clinical proof. General Mills’ representations are false, misleading and reasonably likely to deceive the public.”
The suit further asserts, “General Mills’ own studies fail to support this advertising message, and a number of them flatly contradict General Mills’ claims. In fact, General Mills has never tested Yo-Plus for its ability to deliver the unique health benefits claimed in its advertising campaign.”
A rep for General Mills, which began to market Yo-Plus in August 2007, said: “As a standing practice, we don’t comment on pending litigation.”

Download the Yo-Plus complaint HERE.
Tim Blood, a partner with CSGR&R, the San Diego law firm that had previously won more than $7 billion for Enron shareholders, said Dannon’s settlement puts marketers on notice about making misleading and unsupported claims.
“Marketers had better beware of what they say in their marketing and they better back   up their claims before they say those things to the public,” he said. “The days of fast and loose ad claims should be coming to an end soon. They’ve become much more rampant in recent years and while we’re happy to partner with government agencies in fighting them, this [Dannon] settlement underscores the importance of private litigation in these situations.”
CSGR&R said the claims by both Dannon and General Mills are used to justify premium pricing of products.
Michael Neuwirth, senior director of public relations for Dannon, said the company “decided to settle the lawsuit to avoid the uncertainty and expense of further litigation and denies any wrongdoing.”
The case was scheduled to go to trial in mid March; in April, Adweek confirmed the two sides had begun settlement talks.
In its first year, Activia sales soared to over $130 million, more than three times Dannon’s original forecasts. The launch not only created a new powerhouse franchise for the world’s largest yogurt company in the U.S., it helped drive one of the hottest new functional food categories: those containing probiotic ingredients.
In describing the changes to Activia and DanActive labels and ads as a result of the settlement, Dannnon’s Neuwirth said, “The essence of the claims remain unchanged.”