A lot of food labeling claims go unchallenged.
But when Tyson Foods Inc. in 2007 began its “Raised Without Antibiotics” advertising campaign, it was challenged with false advertising claims by two of its competitors.
Perdue Farms and Sanderson Farms both went to court to accuse Tyson of unfair competition for making “implied superiority” claims.
Chicken feed used by Tyson contains the antibiotic known as ‘ionophores” to control intestinal disease in poultry. Tyson claimed it is not the kind of antibiotic that could affect human resistance.
Perdue and Sanderson were claiming combined losses due to the unfair competition of $14 million before Tyson was ordered to stop making the “Raised Without Antibiotics” claims.
Tyson settled with Perdue and Sanderson, but then eight consumer lawsuits were filed around the country before being consolidated in U.S. District Court in Baltimore.
Now those lawsuits are also being settled much like the way class actions end.
Tyson is going to pay out $5 million.
Consumers who just happen to have their receipts or valid proofs of purchase for fresh or frozen Tyson chicken, Cornish hens, or deli meat between June 19, 2007 and April 30, 2009 or prepared chicken products like chicken tenders between Nov. 1, 2007 and April 30, 2009 can get up to $50.
Consumers who will swear under penalty of perjury that they bought Tyson products during the time period can get $10.
Consumers who will swear they bought a Tyson “Raised Without Antibiotics” chicken can get a $5 Tyson coupon.
At a “fairness hearing” Friday in Baltimore, Judge Richard D. Bennett said he okay with the consumer part of the settlement, but he was uncomfortable with the additional $3 million fee settlement with the lawyers, which are led by James J. Pizzirusso of Hausfeld LLP in Washington, DC.
“When the public looks at these class action settlements, there is a general perception that a lot of money goes to lawyers and not enough goes to consumers,” Bennett said.
Tyson’s Gary Michelson said the Arkansas-based Fortune 500 company is “pleased with the settlement” and believes it “acted appropriately.” The Tyson spokesman also said “it makes sense for us to resolve this legal matter and move on.”
Consumers eligible for the $5 coupon, $10 or $50 cash will be notified through a widespread advertising campaign in Parade and People magazines, Weather.com, CNN.com, and Parenting.com. in addition to 400 other news and entertainment Web sites.
“It’s about getting money in the hands of consumers and deterring this kind of conduct in the future,” said Pizzirusso.