Dennis v. Kellogg Co.

697 F.3d 858 (2012)

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Dennis v. Kellogg Co.

United States Court of Appeals for the Ninth Circuit
697 F.3d 858 (2012)

Facts

Kellogg Co. (Kellogg) (defendant), the maker of Frosted Mini-Wheats cereal, advertised that the cereal was scientifically proven to increase children’s attentiveness for several hours after the cereal was eaten. Subsequently, two false-advertising class-action lawsuits were filed against Kellogg. The plaintiffs’ attorneys in both lawsuits worked with Kellogg to reach a proposed nationwide settlement agreement. Kellogg agreed to contribute $2.75 million to a settlement fund. Class members could claim $5 for each box of cereal they had bought during the claim period, up to a maximum claim of $15 per person. Citing the cy pres doctrine, the parties agreed that any funds remaining after all claims had been paid were to be donated to unnamed charities chosen by the parties and approved by the court. Kellogg agreed to distribute an additional $5.5 million worth of food to unnamed charities to feed the indigent. The agreement did not establish a method for valuing the food. The parties valued the total settlement at $10,641,500. Based on this valuation, class counsel requested $2 million in attorney’s fees. Two class members objected to the settlement, arguing that the cy pres relief was inappropriate and the attorney’s fees were excessive. The district court approved the settlement and granted the attorney’s-fee request, and the objectors appealed.

Rule of Law

Issue

Holding and Reasoning (Trott, J.)

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