Ang v. Bimbo Bakeries USA, Inc.

Background

Alex Ang and Lynn Streit brought a consumer class action alleging that Bimbo Bakeries misbranded baked goods. The alleged labeling issues included use of the American Heart Association’s “Heart-Check Mark” without identifying it as a paid endorsement, whole-grain claims, labeling products as “bread” despite added coloring, and “100% Whole Wheat” labels on 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 court certified four classes for injunctive relief under Federal Rule of Civil Procedure 23(b)(2), but denied certification of a damages class. After mediation, the parties reached a revised settlement. The settlement provided no monetary relief to class members. Instead, it required specified labeling or ingredient changes, including removing coloring, soy flour, or the Heart-Check Mark from certain products, discontinuing some products, and removing certain whole-grain claims. For two years, Bimbo Bakeries also agreed to notify class counsel before making certain relevant labeling or formulation changes. The settlement released class members’ certified claims for injunctive, declaratory, or other equitable relief, while preserving their ability to pursue monetary claims independently.

Final Settlement Approval

The court found that the parties implemented the previously approved notice plan. The plan included a joint press release, website postings, links to case documents, and notice to the United States and California Attorneys General as required by the Class Action Fairness Act. Although one objector argued that the notice on Bimbo Bakeries’ website was insufficient, the court found that the website notice, press release, and related efforts together provided the best practicable notice.

The court also found the settlement fair, adequate, and reasonable. It considered the risks of continued litigation, including Bimbo Bakeries’ position that its labels were not misleading, that class members were not injured, and that the named plaintiffs lacked standing to seek injunctive relief. Because the certified classes could obtain only injunctive relief at trial, the court concluded that the labeling and ingredient changes achieved much of what the plaintiffs could have obtained through litigation. Only one class member objected, which the court viewed as supporting approval. The court denied the objections and granted final approval of the class action settlement.

Attorneys’ Fees and Costs

Class counsel requested $325,000 in attorneys’ fees and costs, although counsel’s claimed lodestar—the total produced by multiplying reasonable hours by reasonable hourly rates—was $987,531.73. The court found that the lodestar included duplicative, unreasonable, clerical, and block-billed time. It reduced the lodestar by $148,490.67, resulting in a revised lodestar of $839,041.06.

The court further reduced the award because it had repeatedly intervened to protect absent class members’ rights during settlement negotiations. The court also found that the value of the injunctive relief was uncertain, that some product changes resulted from Bimbo Bakeries’ independent business decisions, and that several products had been discontinued or divested. The court reduced the fees and costs to approximately one-third of the revised lodestar and granted in part the request by awarding $225,000.

Incentive Awards and Disposition

Class counsel requested $5,000 incentive awards for each named plaintiff. The court denied the request in its entirety. It was concerned that the named plaintiffs would receive preferential treatment even though absent class members would receive no monetary awards, the value of the injunctive relief was uncertain, and the court had questioned whether the named plaintiffs and class counsel adequately protected absent class members’ interests.

Judge Haywood S. Gilliam, Jr. therefore granted final approval of the class action settlement, granted in part the request for attorneys’ fees and costs, and denied the request for incentive awards. The parties were directed to implement the settlement and file a stipulated final judgment within 21 days.