Ghirardelli agreed to pay $5.25m into a settlement fund to resolve the case.
In 2012, claimant Scott Miller alleged in a Californian district court that five Ghirardelli products were fraudulently labeled as ‘White’ or ‘White Chocolate Flavored’ because they did not contain the requisite amount of cocoa butter. Miller was only allowed to pursue his claim for Ghirardelli Chocolate’s Premium Baking Chips – Classic White - as this was the only product that he purchased.
Ghirardelli agreed to settle the case out of court after settlement discussions that began in summer 2013.
“I believe the proposed Settlement is fair and reasonable. Indeed, I believe that it is an excellent settlement,” said Adam Gutride of Gutride Safier LLP, the law firm representing Miller.
“The evidence obtained in discovery showed that Defendant’s White Chips packaging and advertisements were likely to (and did) deceive unsuspecting consumers, and based on my review of information obtained during discovery, I believe that Defendant knew of the deceptive nature of the White Chips packaging.”
Ghirardelli spokesperson Sara Jones said: "Ghirardelli stands behind the accuracy and integrity of its labeling and marketing. We are in full compliance with FDA and all other regulations. We nonetheless elected to settle this case to avoid the expense and distractions of litigating what we believe to be nuisance allegations. Our focus continues to be on making the premium chocolate products our customers expect from Ghirardelli."
FDA labeling rules
"The luxuriously deep flavor and smooth texture of Ghirardelli Premium Baking Chocolate delivers the ultimate chocolate indulgence. We hand-select the world’s finest cocoa beans and roast them to perfection and then blend the purest ingredients to achieve our award-winning chocolate. For our Classic White Baking Chips, pure vanilla and whole milk powder combine to create rich, melt-in-your-mouth bliss. Experience the Ghirardelli difference:
• All Natural ingredients
The US Food and Drug Administration (FDA) says that products labeled ‘White Chocolate’ must contain a minimum of 20% cocoa butter and items called ‘White Chocolate Flavored’ are only allowed when the product has some natural derivative of cocoa butter or cacao fat.
The ingredients list for Ghirardelli’s ‘Classic White’ baking chips includes no white chocolate, cocoa or cocoa butter. The baking chips are made with pure vanilla and whole milk powder, which is labeled.
The $5.25m figure was reached based on Ghirardelli’s $34m wholesale sales of White Chips.
Consumers who purchased White Chips when the product carried ‘deceptive’ labeling will receive $1.50 for each purchase and $0.75 for buying the other products. Their total recovery will be limited to $24, unless they submit Proof of Purchase, in which case there is no limit.
The other products concerned were ‘White Chocolate Flavored Confectionary Coating Wafers’, Sweet Ground White Chocolate Flavor, ‘Premium Hot Beverage – White Mocha’, ‘Frappé Classico – Classic White’.
Lawyers for Miller received $1.67m of the settlement fund.
Lindt recently overtook Nestlé to become the third largest chocolate company in the US after in acquired Russell Stover for an undisclosed sum.