SAN FRANCISCO — Lawyers for the plaintiffs have requested $5 million, or one-third of a $15 million class action lawsuit settlement involving the labeling of Post Consumer Brands cereals, according to an April 14 filing in the US District, Northern District of California.
The $5 million request exceeds a 25% benchmark, but the lawyers justified the amount based on the result achieved and the risky nature of the litigation.
A preliminary court approval for the settlement came on Feb. 24. Post Consumer Brands, a business of St. Louis-based Post Holdings, Inc., agreed to stop using terms such as “no high-fructose corn syrup,” “less processed,” “wholesome,” “smart” and “nutritious” on its ready-to-eat cereal products where 10% or more of the calories come from sugar. Cereals involved included Post Selects, Great Grains, Honey Bunches of Oats, Shredded Wheat and Good Morenings.
A final hearing is scheduled for June 23.
Jackson & Foster, LLC and the law office of Jack Fitzgerald, PC, represent the plaintiffs. In the court filing, the lawyers said $5 million was justified under a lodestar-multiplier crosscheck analysis since it represents a 1.78 multiplier to the lawyers’ lodestar of more than $2.8 million. Lodestar is a method used to compute attorney fees.
The lawyers pointed out they risked thousands of hours of work and nearly $1 million in out-of-pocket expenses on a novel liability theory and reached a resolution after more than four years of litigation. The plaintiff lawyers reviewed over 59,000 pages of documents produced by Post, served subpoenas on 34 third parties, took 12 depositions, defended another 9 depositions and retained 5 experts who collectively authored 10 reports. The plaintiffs prevailed (usually wholly, but sometimes in part or as a practical matter) in 14 of the 19 substantive motions in the case, according to the April 14 court filing.
The plaintiff lawyers seek an additional $967,606 in reimbursement for litigation costs. Finally, the lawyers requested the court should pay class representatives Debbie Krommenhock and Stephen Hadley service awards of $7,500 each.