Ang v. Bimbo Bakeries USA, Inc.

Background

Alex Ang and Lynn Streit brought this consumer class action against Bimbo Bakeries USA, Inc. They alleged that Bimbo’s baked goods were falsely, misleadingly, or deceptively labeled. The allegations involved, among other things, paid endorsements that were not identified as such; “good” or “excellent source of whole grain” statements; products labeled as “bread” despite containing added coloring; and “100% Whole Wheat” products made with non-whole-wheat flour.

The claims arose under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act. The plaintiffs sought injunctive relief and statutory damages and proposed classes of California consumers who purchased specified products from March 18, 2009, onward.

The court previously narrowed the claims by granting in part Bimbo’s motion to dismiss. In 2018, it certified four classes under Federal Rule of Civil Procedure 23(b)(2), which concerns class-wide injunctive or declaratory relief, but denied certification of a damages class. The court appointed Ang and Streit as class representatives and appointed the identified law firms as class counsel.

The parties reached a settlement after mediation and first sought preliminary approval in December 2019. The court denied that motion because of concerns about the proposed release and the lack of meaningful notice to absent class members. The parties then filed the renewed motion addressed in this order.

Revised Settlement

The revised settlement class mirrors the previously certified classes: persons or entities that purchased in California any Bimbo products identified in the class-certification order.

The settlement requires changes to numerous products, including removing coloring, removing or changing whole-grain statements, removing soy flour from ingredient lists, removing American Heart Association Heart Check Marks, and discontinuing certain products. For two years after the settlement’s effective date, Bimbo must notify a designated class-counsel representative of specified changes involving whole-grain statements, soy flour, or coloring. Class counsel then has 15 days to object, after which the parties must work in good faith to resolve disputes.

The agreement releases specified claims for injunctive, declaratory, or other equitable relief brought on behalf of the class, as well as specified individual claims belonging to the named plaintiffs. It does not waive claims arising entirely after the settlement’s effective date. The parties also agreed to waive the protections of California Civil Code section 1542, which otherwise preserves certain unknown claims.

Bimbo agreed to make $325,000 available, subject to court approval, for class counsel’s attorneys’ fees and costs and incentive payments to the class representatives. Class members receive no other monetary relief. Ang and Streit may each seek an incentive award of no more than $10,000. The court reserved the decision on the actual fee and incentive awards for the final-approval stage.

Preliminary Approval Analysis

Under Federal Rule of Civil Procedure 23(e), a class settlement requires court approval. At the preliminary-approval stage, the court considers whether the settlement appears to result from serious and informed negotiations, avoids improper preferential treatment, falls within the possible range of approval, and has no obvious deficiencies.

The court found that the settlement’s “clear sailing” provision—Bimbo’s agreement not to oppose a fee request—did not weigh against preliminary approval because attorneys’ fees would not reduce the class’s injunctive relief. The court noted that it would scrutinize any fee request carefully at final approval. It also found that the possible incentive awards did not make the settlement improper at this stage because the court would decide whether the awards and their amounts were justified based on evidence presented later.

The court concluded that the settlement was within the possible range of approval. Because the certified classes could recover only injunctive relief at trial, the court found that the product-labeling and ingredient changes could accomplish much, if not all, of what the plaintiffs might obtain through further litigation. The court found no obvious deficiencies.

Class Notice and Disposition

The proposed notice plan requires a joint press release, publication of the notice and key documents on class counsel’s public websites, publication of the notice on Bimbo’s public website, and notice to the United States and California Attorneys General under the Class Action Fairness Act. The plan does not provide direct notice to consumers. The court nevertheless found publication-based notice reasonably calculated to inform class members under the circumstances.

Judge Haywood S. Gilliam, Jr. granted the plaintiffs’ renewed motion for preliminary approval of the class action settlement. The court directed the parties to submit a schedule for posting notice, filing fee and incentive-payment motions, filing the final-approval motion, receiving objections, and holding the final fairness hearing. This order granted preliminary approval; it did not itself grant final approval of the settlement or award fees or incentive payments.