Vegan cookie company, Lenny & Larry’s Inc., has reached a $5 million settlement with a proposed class of consumers who accused the company of misstating the nutritional value of its “Complete Cookie.” The proposed class action plaintiffs alleged that the Complete Cookie’s label violated the federal Food, Drug and Cosmetic Act and a variety of state consumer protection laws by (i) understating the calorie, carbohydrate, fat and sugar content; (ii) overstating the protein content; and (iii) miscalculating the percent daily protein share.

Under the terms of the settlement, Lenny & Larry’s will put $5 million in a common fund, with $1.85 million towards cash payments – with portions of this cash payment going toward administrative costs, the plaintiff’s fees and costs, and named plaintiff’s incentive awards – and $3.15 million towards free product. Any unclaimed cash will go toward free cookie distribution instead, and if the initial free cookie distribution doesn’t exhaust the entirety of the $3.15 million product inventory, the remainder will be sent to retail outlets to be given to consumers for free. Additionally, Lenny & Larry’s retain the right to terminate the settlement if more than 300 settlement class members opt-out of the settlement.

Takeaway: As we have previously written, advertisers of food products should continue to pay special attention to the labelling of ingredients in light of the continued scrutiny by the class-action bar.