Cargill, Inc. has agreed to pay $6.1 million to settle a consumer class action accusing the company of marketing its Truvia sweetener as natural when it actually contains largely synthetic and chemically produced ingredients, according to documents signed by a Hawaii federal judge.
Under the deal, Cargill will pay $6.1 million into a settlement fund to be distributed to the members of a nationwide class who purchased any of the Truvia products during a six-year period that ended in July 2014, as well as $1.8 million in attorneys’ fees that will be deducted from the settlement fund.Class members who file claims will be entitled to receive up to $45 in cash or $90 in vouchers, according to the settlement, which was finally approved by U.S. District Judge Leslie E. Kobayashi on Nov. 26.
The company has also agreed to certain label changes that will clarify its “Nature’s Calorie-Free Sweetener” and “Truvia Natural Sweetener provides the same sweetness as two teaspoons of sugar” statements, add language directing consumers to a new website with frequently asked questions, remove the phrase “similar to making tea” on all Truvia packaging, and update its Truvia website to better explain to consumers the manufacturing processes involved.
Judge Kobayashi denied three objections to the settlement, each of which included arguments that the attorneys’ fees were unreasonable, after determining that they lacked merit. Specifically, she determined that requiring opt-out by mail would not be unduly financially burdensome and that the claims process is fair.
She also said that the attorneys’ fees, which are 30 percent of the settlement, were largely reasonable. In a few cases, she adjusted down a few hourly rates that were above the rates typically used in Hawaii of $300 for experienced attorneys and $150 for an attorney with between one and four years experience.
“Even when the court adjusts the few attorneys whose rates were above the Hawaii rate, the multiplier is still within the permissible and reasonable range,” she said.
The plaintiffs’ original July 2013 complaint accused Cargill of joining forces with Coca-Cola in 2008 to develop a purportedly natural sweetener that would capitalize on consumers’ desire for a health conscious, non-caloric alternative sweetener. The suit alleges that Cargill developed a deceiving marketing and labeling campaign that made consumers believe that Truvia is a natural sweetener made primarily from the stevia plant.
In fact, the complaint says, the stevia-derived ingredient, Rebaudioside A, comprises only 1 percent of Truvia and is a highly chemically processed and purified form of stevia leaf extract. The main component of Truvia, erythritol, is synthetically fabricated, according to the complaint.
The plaintiffs alleged that through this misleading advertising, the defendants were able to charge approximately 300 percent more per packet than Sweet ‘N Low and 67 percent more per packet than Splenda.
The case is Denise Howerton, Erin Calderon and Ruth Pasarell, Individually and on Behalf of All Others Similarly Situated vs. Cargill Inc., case number 1:13-cv-00336, in the U.S. District Court for the District of Hawaii.