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Consumers may get nothing out of the Nestle Purina dog treat settlement

Following the initial excitement of the proposed settlement in the nationwide class action lawsuit against Nestle Purina in the poisoned pet treats case, consumers started to worry. After doing some basic math, they began to question if consumers would be adequately or fairly compensated for the illness and death of their pets due to the contaminated Waggin’ Train and Canyon Creek Ranch pet treats considering the number of members in the class. Despite assurances that consumers could recover “up to 100% of certain economic damages,” consumers are not convinced.

Even the putative class representatives do not believe that the settlement will be adequate to pay these claims. In a recent comment on Poisoned Pets about the proposed settlement, plaintiff Terry Safranek wrote:

“According to our lawyers and [Nestle Purina’s], the amount should be able to pay out at 100%. Not that I believe that for one single second.”

The most glaring deficiency in the parties’ request for preliminary settlement approval is that no information has been provided that would enable the court to quantify the potential recovery for the class at trial or compare that potential recovery against the settlement amount.

Millions vs. billions

It is not surprising that the parties have glossed over this point, however, because the evidence indicates that the potential recovery could be in excess of $1 billion – a far cry from the parties’ proposed $6.5 million settlement.

In an affidavit, Nestle Purina stated that between 2011 and 2012:

“Waggin’ Train revenue from sales of Waggin’ Train and Canyon Creek Ranch brand jerky dog treats in Missouri exceeded $7.5 million.”

Extrapolating from the 2011 – 2012 sales figures in Missouri, it can be estimated that nationwide sales of the products for the six-year time period from 2007 (when the FDA first warned the harmful nature of the products) to January 2013 (when the products were finally recalled) were approximately $1.125 billion.

Further, it also is extremely conservative because the proposed settlement class is temporally unlimited and would include purchases dating further back than 2007.

Less than zero

The value of the proposed nationwide settlement becomes even more objectionable when considering that the net recovery for class members may be almost zero.

Before the class recovers even one dollar, the $6.5 million gross settlement fund will be reduced by attorneys’ fees (up to $2,145,000), litigation expenses (up to $100,000) and incentive awards for the named plaintiffs ($120,000). This leaves a net settlement fund of $4.135 million that will be further reduced by the costs of a claims administration process, which may consume most or all of the remaining settlement proceeds, which could almost completely wipe out the remaining amount of the settlement fund.

Glaring deficiencies

In addition to these glaring deficiencies, the parties have failed to provide other basic, but crucial, information related to the proposed settlement. For example, the parties have not provided any estimate (let alone evidence) of the expected number of class members, nor have they provided any evidence regarding the value of claims other than the purchase claims (i.e., claims for recompense of pet injuries, deaths, and health screenings). Without this additional information, it is impossible for the court to compare the value of the proposed settlement with a reasonable estimate of the class’s likely recovery.

Quality assurance practices: Who wins?

While the parties and their attorneys tout the significance of the injunctive relief of the “quality assurance practices” imposed on Nestle Purina to justify settlement approval, the victory is hollow because the Waggin’ Train months ago implemented the “quality assurance practices” called for under the proposed settlement when they brought the dog treats back to the market. And, even if the quality assurance practices could be credited as an achievement of the settlement, the “value” assigned to the injunctive relief should have little, if any, bearing on the court’s final approval determination.

Instead, Nestle Purina has been milking the quality assurance impositions to their benefit, using their “quality assurance practices” as a marketing tool by assuring potential consumers of the quality and safety of their products.

Because consumer class actions are primarily driven by the recovery of damages and attorneys’ fees, the proposed “quality assurance practices” changes will not aid the class in any significant way, as consumers (class members) have already been deceived by the labeling and marketing of Nestle Purina’s pet treat products.

Limitations on the loss of a pet

Because the deaths and injuries caused by the contaminated pet food all involved animals, the law views the situation differently than it would if humans had died. The law in most U.S. states views pets as property. Any negligent act, which causes harm or death to an animal, is treated as property damage, not personal injury.

While the law supports arguments over the illness and death of humans resulting from a product entitled to damages for emotional distress and loss of companionship, the illness or death of an animal entitles pet parents far less: At most, a pet parent will only be able to recover the “fair market value” of the pet and veterinary expenses.

Attorneys have attempted to argue that pets are “special property” – that is, they have some intrinsic value to their owners not measured by their market price –such as unique family heirlooms and other items with value that are not easily reduced to dollars and cents, but unfortunately, that argument yet to be successfully applied to pets.

Does the settlement survive scrutiny?

The disparity in the values of potential recovery and settlement demonstrates that the proposed settlement cannot survive scrutiny. A settlement fund of $6.5 million seems inadequate in the face of alleged losses of such magnitude. But what can consumers do if they think the proposed settlement is inadequate, unfair and unreasonable?

Enter the objectors

Connie Curts, a Missouri resident who has been prosecuting her own separate class action against Nestle Purina and Waggin’ Train, has moved to intervene in the federal district court in Illinois and has filed objections to the proposed class settlement. Ms. Curts filed and Initial Objections to Preliminary Approval of Class Settlement and Certification of Nationwide Class in June. In the Motion to Intervene, it states:

…The proposed nationwide settlement is objectionable in many respects…Most significantly, the settlement reflects a paltry net recovery (perhaps as little as no money at all) on the claims of hundreds of thousands of consumers with total damages of $1 billion or more…

If other members of the class smell a sell-out they should object to approval of the proposed settlement. Consumers have an opportunity to voice their opinion to the court who will be making the final settlement of the class by recommending that the judge reject the approval of a settlement involving such a meager recovery.

A chance to have your say

Do you think the settlement is fair? If not, then you must tell the court that you object to the proposal. If you have comments about, object to or disagree with, any aspect of the proposed settlement, you should express your views to the court in writing. All you have to do is state, in writing, your reasons for your, the basis for any such objections, and provide a statement of whether you intend to appear at the Final Approval Hearing, either with or without counsel. You must include in the objection:

  • Your name, address, and telephone number,
  • a brief explanation of your comment or reason for objection,
  • if you are represented by counsel,
  • provide proof that you are a Settlement Class Member (such as proof of purchase, proof of injury or death of pet, or sworn declaration under penalty of perjury),
  • it must state that it relates to any one of the following actions: Adkins et al. v. Nestlé Purina PetCare Company, et al., Case No. 1:12-cv-02871 (N.D. Ill.); Matin v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-01512 (N.D. Ill.); or Gandara v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-04159 (N.D. Ill.),
  • it must be signed by you,
  • it must be postmarked on or before May 25, 2015 and mailed to:

    Clerk of Court
    Everett McKinley Dirksen United States Courthouse
    219 South Dearborn Street
    Chicago, IL 60604

In addition, you must also send a copy of your comment or objection by first-class mail to the attorneys for the settlement class and the attorneys for the defendants listed below, not later than May 25, 2015:

Attorneys for Defendants
Craig A. Hoover
E. Desmond Hogan
Miranda L. Berge
Hogan Lovells US LLP
555 13th Street, NW
Washington, D.C. 20004

Attorney for Settlement Class
Stuart A. Davidson
Robbins Geller Rudman & Dowd LLP
120 E. Palmetto Park Road, Suite 500
Boca Raton, FL 33432
Email: sdavidson@rgrdlaw.com
Tel: (561) 750-3000

If you have any questions about the proposed settlement I urge you to read the FAQ page on the Dog Treat Product Settlement website.

Final thoughts

Even if a presumption of fairness applied, the proposed settlement should not be approved.

If consumers do not object and instead file a claim, they forfeit all rights to future litigation. In short, whatever paltry compensation consumers receive, if any, will be buying their silence for eternity.

It is my opinion that the proposed nationwide class settlement does not fairly, adequately, and reasonably compensate the class as a whole.

SOURCES:
Dog Treat Product Settlement
Connie Curts Objections to Proposed Class Settlement
Connie Curts Motion to Intervene

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Mollie Morrissette

Mollie Morrissette, the author of Poisoned Pets, is an animal food safety expert and consumer advisor. Help support her work by making a donation today.

Comments (28) Write a comment

  1. Has anybody seen the new Purina commercial with “chloe the boxer” and his proud owner that works at Purina. Makes me change the channel everytime I see it. What a bunch of hypocrits

    Reply

    • Yes, I have seen it several times and every time I see any Nestle Purina advertisement I change the channel because it is all deception for the viewer. Notice how the ads never say anything factual. They just show beautiful happy animals with their happy “owners” enjoying HEALTH and LIFE in scenarios that elicit a positive emotional reaction if you don’t realize it is nothing more than propaganda for the corporate deep pockets to make bigger profits.

      Reply

      • Do you know when checks are to be mailed…I got approval letter but no date on that mailing time

        Reply

        • The latest update that I received anticipated that the checks could be sent out this month since the 90 day appeal period has ended. We should see them soon I think.

          Reply

          • The checks may only be for approximately 60% of each claim total since the total amount awarded was insufficient to make people 100% whole, financially speaking only.

          • Lord, that is disgraceful.

            You know, I got slammed for this post. Everyone wanted to believe the settlement was a kind of victory – but I saw it the way Nestle saw it – as a clever way for Nestle to concede to using improved monitoring of their manufacturing process and turn it around to their advantage as a feel-good, aren’t we concerned about pets PR BS. Nestle turned around every single “quality assurance” promise to convince consumers of their commitment to quality. What a crock.

            I didn’t dare do a post on that ugly sideshow, as I know every plaintiff who saw the QA as a victory would have ridden me up one side and down the other for not seeing the QAs as a victory. I saw it as a golden opportunity for Nestle to turn it around and use it as marketing tool – whereby getting more customers; the very last thing any of the class members wanted, but were going to get despite the incredible hard work they did.

            The last thing I wanted to see is the hard work the plaintiffs did, the suffering they endured, because of the tragic loss of their pets be, used by the very company that was responsible for their tragedy. They could not have foreseen how, in getting Nestle to concede to the QAs, they provided Nestle with the golden opportunity to use them as marketing tool.

          • I think there are two sides to it. Yes, you were right that the settlement was inadequate. On the other hand, pets are property and there was never a definitive link established by the government agencies or the litigants, so getting a settlement at all does seem like a victory to me. It certainly brought unprecedented attention to pet food quality and products from China.
            I give you a great thumb’s up for the work you did on this and I know lots of other people do as well. Thank you Mollie!

          • You’re right about that. Yes. In that sense it was a tremendous victory. The negative publicity surrounding the case crippled their treat business, which also caused Nestle to lose consumer confidence in their brand in general. And it was a very significant victory considering pets are valued as property and that there was no definitive “proof” of harm. I’m sorry – as usual I stuck my foot in it.

  2. I just wanted to say that this is actually turned my thinking around about what I feed all my animals. I’ve always been careful with my livestock because that industry always has problems, but never really worried about my domestic pets. My new corgi “Doc” gets “no dog treats” or commercial canned foods. For treats I use “dollar store” butter cookies broken up into pieces or carrots or apples or green beans. He doesn’t seem to miss the “bagged treats” and will actually reach in the refrigerator to get his carrot at dinner time. His bed time snack is “rice chek’s cereal” generic actually and he loves it because we can play catch with the pieces. I use apples, carrots or green beans in his dinner. Believe it or not it’s even made me look at the stuff I eat a different way. We may not see anything from this suit for years they way it’s going but made it will make the “animal community” a little smarter and more willing to boycott the offenders.

    Reply

    • I’m so pleased I have been able to influence you. I think what you are doing is much better than feeding your dog commercial pet food treats – this way you can be assured they are “human-grade”. Homemade is always a better option. Keep up the good work!

      Reply

  3. Im shocked that they are allowed to sell the “treats” still I mean my god FDA what is it going to take first its lead paint in child toys among other things are the low cost products from China japan really worth it ALWAYS BUY AMERICAN god forbid you ever regret choosing not to

    Reply

  4. I’ve been reading all kinds of stuff on the other website some saying that Nestle will not release funds until all appeal dates have passed. Some are saying it will be a year before disbursement. We lost our corgi to this and I find it appalling that the dog food industry and just do whatever they want. Sure we might have gotten a “made in china” warning put on the bag but what we need is for the FDA to get involved in dog food just as they do in people food. Or an agency started to “watchdog” these companies to make sure they are following protocols. The fact that Nestle-Purina is getting hit time after time should make them take a better look at their business practices, not just put a bandaid on them. I would love to know from some of the “top” class members and their lawyers what is really happening with this, even the dog settlement website doesn’t seem to know what is going on.

    Reply

    • I am a member of the Canyon Creek class litigation and I just received an update two days ago. The disbursements are anticipated to be made in March 2016 because there is a 90 day appeal period for the complainant whose case was just dismissed to file an appeal. That gives Nestle Purina the legal right to delay the disbursement of any settlement checks until the appeal period has ended.
      I suggest if you did not receive this update that you check in with your legal firm to make sure that all of your contact info is available to them.
      My sincere condolences to you on the loss of your precious Corgi. My dog barely survived the poisonous treats and requires expensive regular medical care for the rest of her life, none of which will be reimbursed, but we feel very lucky to have our little “kid” to still be part of our family. I will never buy another Nestle Purina product ever again, altho I must say Purina is getting very sly about not putting their name on product labels after they take new and formerly independent companies over. The only way to discover their affiliation in some cases is to ask the manufacturer if they partner with Nestle Purina.

      Reply

  5. Dog Treat Products Settlement 
    Adkins et al. v. Nestlé Purina PetCare Company, et al., Case No. 1:12-cv-02871
    Matin v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-01512 (N.D. Ill.);
    Gandara v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-04159 (N.D. Ill.)

    Hey everyone info on the Appeal its been dismissed, finally!

    Per Atty : Dec 10, 2015, 10:42 AM

    “Just entered!  Hoping that payments can be made before X-Mas, but am confirming.”

    December 10, 2015 
    Appeal Dismissed
    Settlement Status – PRE-DISBURSEMENT

    Go to website

    https://www.dogtreatproductssettlement.com

    See Important dates on left,then look at top of page

    Click on
    Important Documents

    Click on
    Order Dismissing Appeal (last one)

    (this is a pdf file & it immediately dwnloads the courts dismissal)

    Everyone Be well,safe God bless…
    Have a blessed Holiday Season…

    Reply

  6. Hey Everyone, hope this message finds you all well. Happy Thanksgiving to all of you & your furry kids too! :)

    Heres the latest from Law Firm & sounds promising.:)

    Purnia Pet Settlement

    Hi.  The trial judge granted our motion and rescinded his order allowing the objector to appeal for free.  Now, the objector has until Monday to either pay the appeal fee or ask the appeals court to allow her to appeal for free.  I would be shocked if she did either because the trial judge found that she probably lied to him about her finances and that her appeal is brought in bad faith.  However, she could still do so just to be a jerk.  Email me next Friday and I will let you know what she did.  If she does nothing, her appeal will be dismissed and payments can finally be made to class members a few weeks after the dismissal is final.
    Happy Thanksgiving to you and yours!

    Reply

    • Dog Treat Products Settlement 
      Adkins et al. v. Nestlé Purina PetCare Company, et al., Case No. 1:12-cv-02871
      Matin v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-01512 (N.D. Ill.);
      Gandara v. Nestlé Purina PetCare Company, et al., Case No. 1:13-cv-04159 (N.D. Ill.)

      Hey everyone info on the Appeal its been dismissed, finally!

      Per Atty writes :

      Dec 10, 2015, 10:42 AM

      “Just entered!  Hoping that payments can be made before X-Mas, but am confirming.”

      December 10, 2015 
      Appeal Dismissed
      Settlement Status – PRE-DISBURSEMENT

      Go to website

      https://www.dogtreatproductssettlement.com

      See Important dates on left,then look at top of page

      Click on
      Important Documents

      Click on
      Order Dismissing Appeal (last one)

      (this is a pdf file & it immediately dwnloads the courts dismissal)

      Everyone Be well,safe God bless…
      Have a blessed Holiday Season…

      Reply

  7. Here’s the latest I’ve heard on the Pet Product Settlement Appeal. The motion decision on Oct 6th. Just more delay & disappointment. :( Surprised Judge would even give these questionable Objectors more time. Meanwhile delayed again. Maybe Christmas :)

    “Judge will rule by mid-November after giving the objector a chance to respond and me a chance to reply.  Wish it was sooner; but it is what it is.”

    Reply

  8. Based on your research what would be an adequate settlement amount? What would you change about the settlement? I’m sure many would like to know before they make their decision.

    Reply

    • An adequate, reasonable and fair settlement would be commensurate with the estimated number of class members (sales figures are not public information), as well as using an estimated number of health claims based on the number of complaints and claims made initially to Sedgewick, Nestle and the FDA. These figures are also not public information.

      These are questions I’m sure were addressed during the two year long negotiations. They are not in any of the court documents I have read. Therefore, it would be up to the court during the final hearing to order some sort of discovery into what those figures/estimates might be.

      I’m not a lawyer, so I don’t know what the precise legal process would be for requesting such data. Maybe a class representative would weigh in. But, considering their bitter feelings towards me at the moment for writing this piece, I doubt I’ll hear a word – other that more expletives – from them.

      Reply

  9. Isn’t the crucial outcome the removal of a huge percentage of products sourced in China (knowing that China isn’t going away anytime soon), changes to the production, and awareness of the problem? It’s not only about the compensation, it’s about the future safety of our pets and trust in the industry.

    Reply

    • The outcome of a lawsuit is judged by the damages, the penalty, or the monetary settlement. I was examining that aspect, not the larger aspect of the effects of litigation in general. I have written many times on that subject (as I have covered so many lawsuits in the past), that obviously companies are hurt by these kinds of class action lawsuits, because it raises consumer awareness – which is always a good thing. Having said that, I doubt if any of the members whose dog was killed by the treats agree with your assessment – the products have not been removed from the market (read They’re back!), the changes in production are meaningless as long as they continue to import from China. They simply can’t control every aspect of production in another country, and if they assure consumers they can and they are they are lying to them. Actually the QA/QC is being used by Purina as a marketing tool to sell more treats – from China!

      Reply

  10. I am a member of the class. My dog, who barely survived the poisoned Waggin Train jerky treats, had a $2000 emergency vet bill plus a lifetime expense of ongoing monthly hormone injections of $50 per month plus her daily medicine cost of $10 per month. To date, her medical treatments just to keep her alive are over $3500.
    I have become skeptical lately that I will recover anything close to that for the reasons outlined in the above article.
    Nor did the settlement allow any reimbursement for future expenses, so the fact that my dog requires over $700 per year for the remaining years of her life is not a reimbursable factor in this settlement. She was only 18 months old when she almost died from the Waggin Train jerky treats, so she has a good number of years left needing ongoing supportive care to stay alive. If she only lives another eight years, that is about another $6000 that comes out of my pocket and will never be reimbursed.
    The quality assurance practices are only temporary as well. Two years is just long enough for the public to forget about the illegal practices in China that resulted in these deaths and injuries. Then it will be back to business as usual for Nestle Purina; that being priority one of raising profits for shareholders.
    All of that said, it is not about the money for me. Still, the settlement does not do enough to hold Nestle Purina et al responsible. Class action cases famously reward the attorneys, underpay the class members, and let the corporations off of the hook. Starting over will take years and more money for court expenses and may result in no payment at all. I admire Connie Curts for doing just that. I have not yet decided which way I will go.

    Reply

    • Thanks for weighing in Ann, I appreciate hearing from class members! I hadn’t realized that (obviously) no one will be compensated for ongoing medical costs. Tragic. The QA/QC business is something I will cover in my next piece and I’m sure I will not win any friends when people hear what I think about it. I have held off writing about it since May – but now I feel I have to say something as people will undoubtedly factor that in when deciding whether to make a claim or object to the proposed settlement.

      As I have said on many occasions the outcome of lawsuits like this only further expand consumer awareness, give companies reason to pause and ultimately they hurt their sales. Of course the monetary relief is not adequate – which is why I hope more class members will object. Now, whether the court agrees is anyone’s guess. We can always hope…

      Reply

    • Ann, I write with a slightly different perspective, but not to be argumentative.
      1. I don’t understand how you concluded that QA is temporary. Per my knowledge and experience, it isn’t.
      2. I read about a few other products settlements with different companies, and I got the impression that settlements ‘never’ cover future damages. (I don’t know for sure.) Although it doesn’t feel like justice, I understand how it’s infeasible. I’d be interested in anyone’s ideas on how companies could realistically compensate consumers for the long-term damages. Business and social changes can take decades (or longer) to change, but they all start with one idea.
      3. I don’t think any company that endured a class acton lawsuit is capable of going back to business as usual because of Human Nature, namely a reaction to fear. Any person who exercised poor judgment on a decision that contributed to a major problem or lawsuit will almost certainly have some level of fear grip them (for many reasons). I think all become self-conscious. Fear makes some people become hesitant to decide, even to the point be indecisiveness. Some will realize they need to improve a skill, such as asking questions differently to obtain more information; of those, some will actually improve themselves while others will try to hide it and make excuses. A few people will continue to have poor judgment and need more experience in life before they have better judgment. Fear evokes change – some good, some bad, but as I see it, the businesses never go back to business as usual, because usual changed.

      Reply

      • I disagree with your analysis with regards to going back to business as usual. I think they do go back to business as usual and calculate these losses into their budget. They spend millions on advertising every year; so, they spend a few million on settling a lawsuit – BFD. They know that they will lose some customers, but did it hurt Blue Buffalo? Not really. It’s just a cost of doing business, is how I believe they look at it. I think it hurts their reputation initially, but they often just drop that brand and bring a “new and improved” one to market. Problem forgotten. I try not to think so negatively, but some days I just think nothing changes. Today is one of those days.

        Reply

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