Dannon Activia class action settlement

A stipulation of settlement has been filed in the Dannon Activia yogurt consumer-fraud case. A $35 million fund will be established to pay claim forms with cash, and plaintiffs' lawyers (including Coughlin Stoia, the lead firm) have "clear sailing" to request $10 million plus expenses from that fund—that's over 28.5% for those of you keeping track at home. A typical contingent fee of 25% would mean a fee of $8.75 million.

Any unclaimed funds will go to charity—which means that, as the settlement is structured, the plaintiffs' firms have no incentive to ensure that the allegedly injured class members will collect the money: their fee is tied to the common fund, rather than to what consumers receive.

That's before we get to the injunctive relief. For that, I'll defer to Russell Jackson, who reports on his blog:

It's understandable that it could make economic sense for a defendant to settle a series of class actions after years of litigation. But this settlement's so-called "equitable" relief involving the defendant's advertising and labeling makes it crystal clear that these lawsuits were not based on any real fraud at all. The settlement allows Dannon to say practically the same thing it always has said. The lawsuits obviously were lawyer-invented, and although they may have survived some motions to dismiss, the settlement's equitable relief demonstrates that the defendant's statements were backed up by real science.

The court has yet to provide preliminary approval to the settlement. If you are a member of the class of Activia purchasers, and you wish to object to the settlement, please let me know.