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The Nutella settlement isn't providing much for the consumers who purchased Nutella.
The $2.5 million settlement against the U.S. branch of the Italian Ferrero Group is giving consumers a maximum of $20 each-- that's $4 for every jar of Nutella purchased up to a maximum of 5 jars.
But as for the class action lawyers behind the lawsuit, they are getting the sweet end of the deal.
The class counsel in the Nutella case filed an application for nearly $4 million in legal fees and related expenses. This takes into account the 30 percent contingency fee as well as expenses.
Not totaling $4 million yet, if we do the math.
But now throw in the other fees that the counsel has asked Nutella's parent company to pay. Ferrero has agreed to pay the class counsel $3 million in fees for the non-monetary relief that the lawyers were able to obtain. This includes the changes in Nutella's marketing campaigns.
The $3 million will come directly from Nutella's parent company or from its insurers, as opposed to coming directly from the settlement fund.
Now, the 30 percent deal isn't a bad one. In fact, it's pretty common with such types of class action deals.
But the additional $3 million is, well, nutty.
Not that nutty, claim the plaintiff's counsel. They claim that the bulk of the case really revolved around the deceptive marketing campaign. And as a result, their fees should commensurate with the work that they accomplished, namely, forcing Nutella to change its marketing practices.
In their advertising, Nutella's makers claimed that the hazelnut spread contributed to a healthy breakfast.
Sure it did. If you factored in the healthy glass of milk and the whole grain toast accompanying the Nutella. But on its own, Nutella was (and is) nothing more than a melted Ferrero Rocher.
Do you think the settlement was fair, given the overall outcome of the case?