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Class-Action Blue Diamond Settlement Challenged in Arkansas

4 min read

A New York attorney said he is coming to Washington County Circuit Court later this month to challenge a class-action settlement against the makers of Blue Diamond almond products that he said is unfair to class members.

The terms of the settlement call for Blue Diamond Growers of Sacramento, California, to set aside $9 million to cover claims that the company mislabeled Almond Breeze almond milk and Nut-Thins as being “all natural” when they weren’t, according to filings by plaintiffs’ attorneys in the case. In addition, the packaging claimed the almond milk was certified by the American Heart Association when it wasn’t, according to court filings.

Blue Diamond has denied any wrongdoing but has agreed to a settlement fund of $7.5 million for Almond Breeze consumers and $1.5 million for Nut-Thins claims.

The settlement fund also will be used to pay the plaintiffs’ attorneys and fees, which will be up to $2.4 million for the lawyers involved in the Almond Breeze claims and $492,000 for the Nut-Thins class counsel.

Blue Diamond has agreed not to object to the plaintiffs’ attorneys’ fees, which, along with the settlement, has to be approved by Washington County Circuit Court Judge Doug Martin. The settlement hearing is set for March 29.

The victims — the customers who bought the Blue Diamond products — could receive up to $5 if they don’t have a receipt and up to $10 if they have one and file a claim by April 13. Any money left from the settlement fund will return to Blue Diamond. Typically in class-action cases where the victims have to file a claim only about 10 percent — or less — actually do.

New York attorney James Kelly is challenging the settlement and told Arkansas Business that the pay to victims “seems a little too small. … Give them $20 a person at least.”

He also said that not enough was done to notify potential class members, such as posting the information on Blue Diamond’s Facebook page.

Kelly is not a party to the Washington County case, but he has an interest in the outcome. He is part of a group of attorneys who have a similar class-action case pending against Blue Diamond in federal court in New York.

If the settlement is approved in Washington County Circuit Court, the New York case and others pending in California state courts will be simultaneously resolved, and Kelly and his co-counsel won’t receive any attorney fees.

Kelly has asked Judge Martin to allow him to conduct discovery to determine why the case was filed in Washington County in 2014 and into the decision to settle the case there.

Arkansas state courts have been known to make it difficult for class members to object to settlements and to be less stringent in their review of class-action certifications and settlements, Ted Frank, director of the Competitive Enterprise Institute’s Center for Class Action Fairness in Washington, has said in court filings involving an unrelated class-action case.

Little Rock Attorney Thomas Thrash of Little Rock, one of the lead attorneys for the class members in the Washington County case, said Blue Diamond wanted to settle the outstanding litigation involving the misbranding claims so the company would save $400,000 on sending out notices to class members.

“They could have done it in New York,” Thrash said. “They could have done it anywhere, but they agreed to do it in Arkansas.”

Thrash also said that he and other attorneys were in mediation and settlement talks with Blue Diamond before Kelly filed his New York case in 2015.

“And so if they had been the ones that got it done, Blue Diamond would have settled with them,” Thrash said.

So far, 120,000 people have filed claims, Thrash said. Those claims would be worth a maximum of $1.2 million — half the attorneys’ fees — if every claimant could produce a receipt. The full amount paid to class members can’t be calculated until after the claims period ends; Thrash said that total would “probably” be made public in court filings.

He said the purpose of the case was to get Blue Diamond to stop misbranding its food products.

“The damage claim to individuals, because it is such a small amount, is not the main focus of these cases,” Thrash said. “It is the injunctive relief we got, and Blue Diamond has agreed to … remove all their misbranded representations.”

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