February 7, 2020
Authored by: Bob Boone and Sarah Burwick
In a multidistrict litigation accusing McCormick & Co. of deceptively underfilling the pepper it sells in grinders and tins, a D.C. federal judge preliminarily approved a $2.5 million class settlement last week.
Consumers first sued McCormick in 2015, challenging the spice manufacturer’s response to economic pressures in the black pepper marketplace. Facing rising wholesale prices and a decreased market share, McCormick reduced the weight of ground pepper in its tins and peppercorns in its pepper grinders by 25% and 19%, respectively, but did not reduce the container size or change the price. Retailers sold the containers with reduced amounts between March 2015 and June 2016. The plaintiffs’ original complaint alleged that McCormick and other brands it supplied misled consumers by constructing the packages to hide the reduction of product with “nonfunctional slack-fill,” or empty space.
Within months of the first case against McCormick, additional copycat consumer suits followed. In late 2015, the Judicial Panel on Multidistrict Litigation transferred all McCormick black pepper slack-fill cases to the U.S. District Court for the District of Columbia. After surviving a motion to dismiss, the plaintiffs moved to certify a variety of multistate and single-state classes of pepper purchasers alleging violation of state consumer protection laws and unjust enrichment.
In July 2019, in a 110-page opinion, the court certified single-state classes of individuals asserting statutory consumer protection claims in three states: California, Florida and Missouri.
The court held that purchasers “were uniformly exposed to the same alleged misrepresentation — pepper containers that did not have visible fill lines and that allegedly contained nonfunctional slack fill.” Additionally, the court found “ample common evidence that the challenged action was deceptive,” including the product’s opaque packaging and McCormick’s internal documents.
The court further observed:
Consumers looking at any of these products on store shelves saw the same containers they had always seen. The label on the container stated the new weight in the same size print and location as the prior weight had appeared. Consumers could not see the fill levels in any of the products; the metal tins were opaque and the fill level of the grinders was obscured by an opaque label. Nor were fill levels necessarily observable even after the products were opened.
The court declined to certify a multistate class due material variations between the states’ consumer protection statutes, specifically with respect to burdens of proof, scienter requirements, and requirements of proving causation and damages, holding that these variations precluded certification under Rule 23(b)’s requirement that common questions of law or fact must predominate over issues affecting individual purchasers. The court also rejected any unjust enrichment class based on predominance grounds.
This settlement, which the court preliminarily approved January 27, is the first significant class payout in the slack fill context since Ferrara Co. settled similar claims involving its candy packaging in 2018, also paying consumers $2.5 million. A New York district court also approved a class settlement last year involving underfilled Barilla pasta packages, but the deal did not provide for monetary damages to class members.
According to the McCormick settlement agreement, which the parties submitted for the court’s approval, the settlement was reached after four separate mediation sessions held between 2016 and late 2019. If approved, the Plaintiffs’ attorneys will be awarded $625,000 in fees. The final approval hearing is set for June 3.